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Submitted by cdp-inc on January 10, 2022 - 1:40pm

According to data released on Friday by the US Bureau of Labor Statistics, the national construction industry added 22,000 jobs on net in December.

Key Takeaways

 

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

Nonresidential Construction Employment Up 27,000 in December, Says ABC

WASHINGTON, Jan. 7—The construction industry added 22,000 net jobs in December, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. Overall, the industry has recovered slightly more than one million (92.1%) of the jobs lost during earlier pandemic stages.

Nonresidential construction employment expanded by 27,000 positions on net, with all three subcategories posting gains for the month. Nonresidential specialty trade added 12,900 jobs, heavy and civil engineering added 10,400 jobs, while nonresidential building employment increased by 3,700 positions.

The construction unemployment rate rose to 5.0% in December. Unemployment across all industries fell from 4.2% in November to 3.9% last month.

“Today’s jobs report has economists shaking their heads,” said ABC Chief Economist Anirban Basu. “Not because it was an especially terrible report, but because the data are so difficult to interpret. The headline number of 199,000 jobs added economywide is deeply disappointing and makes December the fourth month in five that the headline number has fallen short of expectations.

“Dig a bit deeper, and the labor market appears much tighter and stronger than indicated by the payroll growth number,” said Basu. “Economywide unemployment dipped to 3.9% as the labor force participation rate remained unchanged. While it is true that the construction industry rate of unemployment ticked higher, this is likely because of seasonal factors as opposed to a rush of Americans joining the construction workforce.

“While the data are puzzling in many ways, the implication for contractors is reasonably straightforward,” said Basu. “The labor market remains extremely tight going into 2022. Contractors will be competing fiercely for talent. They already have been, according to ABC’s Construction Confidence Indicator, but that competition will become even more intense as dollars from the infrastructure package flow into the economy. Accordingly, contractors should expect another year of rapid wage increases in 2022. Those rising costs, along with others, must be included in bids if margins are to be sustained.”


Press Release from Associated General Contractors of America (AGC)

Construction Adds 22,000 Jobs In December, Jobless Rate Falls To 5 Percent As Ongoing Nonresidential Recovery Offsets Rare Dip In Residential Total

Jobs Figures are Consistent with Relatively Optimistic Outlook the Association will Release on January 12 But Tight Labor Market is Making It Harder for Construction Businesses to Add Even More Staff

Construction employment increased by 22,000 jobs between November and December as nonresidential construction firms added workers for the fourth month in a row while residential construction employment slipped, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said the new employment figures are consistent with the results of a new outlook survey they will be releasing on January 12.

“Nonresidential contractors are increasingly busy and are eager to hire even more workers,” said Ken Simonson, the association’s chief economist. “But the low rate of unemployment and record job openings in construction show how difficult it is bringing enough workers on board.”

Simonson noted that the unemployment rate among former construction workers in December was 5.0 percent, which tied the lowest December rate since at least 2000 and was down from 9.6 percent a year earlier. He added that industry job openings totaled 345,000 at the end of November, an all-time high for November data.

Construction employment in December totaled 7,560,000, an increase of 22,000 for the month and 160,000 or 2.2 percent for the year. However, industry employment still trails the pre-pandemic peak, set in February 2020, by 88,000 positions.

Nonresidential construction firms added 27,000 employees in December, following a pickup of 25,700 in November. The category comprises nonresidential building contractors, with a gain of 3,700 employees; specialty trade contractors, with 12,900 more workers than in November; and heavy and civil engineering construction, which added 10,400 employees. But nonresidential employment remains 169,000 below the February 2020 level. The sector has regained only 74 percent of the jobs lost at the outset of the pandemic.

Residential construction employment dipped for only the third time in 2021, by 4,100 employees in December. Residential building contractors, such as homebuilders and general contractors that concentrate on multifamily construction, added 700 workers during the month, while residential specialty trade contractors shed 4,800 employees. Residential employment in December remained 82,000 above the February 2020 mark.

Association officials said the jobs figures reflect the industry optimism indicated in the annual Outlook survey they will be releasing during a virtual media briefing on Wednesday, January 12. But they cautioned that labor shortages continue to challenge contractors who are struggling to hire enough workers to keep pace with demand.

“The industry appears well poised for a strong recovery in 2022, but there are certainly clear challenges, including labor shortages, that could undermine construction this year,” said Stephen E. Sandherr, the association’s chief executive officer.