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Submitted by cdp-inc on September 6, 2022 - 6:53pm

According to data released Friday by the US Bureau of Labor Statistics, the national construction industry added 16,000 jobs on net in August.

Key Takeaways

 

Press Release from Associated Builders and Contractors, Inc (ABC)

Construction Employment Increases by 16,000 in August, Says ABC

WASHINGTON, Sept. 2—The construction industry added 16,000 jobs on net in August, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has risen by 311,000 jobs or 4.2%.

Nonresidential construction employment rose by 4,300 positions on net, with positive growth in two of three subcategories. Nonresidential specialty trade added 5,600 net new jobs, while nonresidential building added 700 jobs. Heavy and civil engineering employment fell by 2,000 positions.

The construction unemployment rate rose to 3.9% in August. Unemployment across all industries expanded from 3.5% in July to 3.7% last month.

“After several months of declining labor force participation, the rate of participation expanded meaningfully in August,” said ABC Chief Economist Anirban Basu. “It is surprising that the labor force had not been increasing since March because presumably elevated inflation would require more people to work in order to pay bills. Perhaps that, along with higher wages, is what drove the rise in labor force participation from 62.1% to 62.4%. But beneath the headline numbers severe labor market conditions persist.

“This jobs report represents good news for contractors,” said Basu. “The rise in the overall unemployment rate from 3.5% to 3.7% and the expansion in construction worker unemployment from 3.5% to 3.9% means that the labor market has loosened a bit,” said Basu. There was also evidence that compensation growth is slowing, which is relief to contractors who have become increasingly pessimistic about their profit margins, according to ABC’s Construction Confidence Index. While this will not alter the Federal Reserve’s present posture of raising interest rates, the process of labor market normalization appears to be underway.”


Press Release from Associated General Contractors of America (AGC)

Construction Industry Adds 16,000 Jobs In August But Nonresidential Contractors Struggle To Fill Slots Amid 3.9 Percent Unemployment Rate

Association Official Notes that 91 Percent of Contractors are Having a Hard Time Finding Workers According to a New Survey, Likely Limiting the Number of Jobs Added during the Past Month in the Sector

Construction firms added 16,000 jobs in August, according to an analysis of federal employment data released today by the Associated General Contractors of America. Association officials said their newly released survey, conducted with Autodesk, showed contractors are eager to hire more employees but are being stymied by a dearth of qualified workers.

“Nonresidential construction activity is growing but contractors universally report difficulty hiring as many workers as they need,” said Ken Simonson, the association’s chief economist. “With the industry unemployment rate hovering below 4 percent, finding qualified applicants is sure to remain a major challenge.”

Total construction employment climbed to 7,708,000 in August as both residential and nonresidential construction firms added jobs for the month. Nonresidential firms added 4,300 employees, as gains of 700 jobs at general building contractors and 5,600 at nonresidential specialty trade contractors offset a loss of 2,000 at heavy and civil engineering construction firms. Employment in residential construction—homebuilders, multifamily general contractors, and residential specialty trade contractors—increased by 10,900 in August.

Compared to August 2021, the construction industry has added 311,000 jobs, an increase of 4.2 percent. The nonresidential sector added 191,600 of those yearly job gains, an increase of 4.4 percent. Meanwhile, residential construction firms added 118,700 jobs between August 2021 and August 2022, an increase of 4.0 percent.

The unemployment rate among jobseekers with construction experience fell from 4.6 percent in August 2021 to 3.9 percent in August 2022 month, Simonson noted. He said the low unemployment rate is consistent with the association’s recent survey, which found that 93 percent of responding firms had open positions. Of those firms, 91 percent report having a hard time filling hourly craft positions, Simonson added.

Association officials noted that one of the main causes of workforce shortages is the fact few people are being exposed to the opportunities available in the industry and lack basic, essential skills. Seventy-seven percent of contractors report there are few workers available that meet the minimum qualification standards, including being able to pass a drug test, which is something insurance companies require for all workers in the industry.

“Public officials need to boost funding for construction-focused training programs to expose more workers to the opportunities that exist in the industry,” Simonson added. “The industry has the work; it just needs the workers.”