According to data released today by the US Bureau of Labor Statistics:
- The construction industry added 4,000 jobs on net in May. Year-over-year, industry employment has risen by 126,000 jobs, or an increase of 1.5%.
- Nonresidential construction employment increased by 11,300 positions on net, with growth in all 3 subcategories.
- "As federal officials provide more certainty about tariffs, taxes and investment levels, demand for projects is likely to rebound."
Press Release from Associated Builders and Contractors, Inc (ABC)
ABC: Nonresidential Construction Adds 11,300 Jobs in May
WASHINGTON, Jun 6—The construction industry added 4,000 jobs on net in May, 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 increased by 126,000 jobs, an increase of 1.5%.
Nonresidential construction employment increased by 11,300 positions, with growth in all three subcategories. Nonresidential specialty trade added the most jobs, increasing by 4,500 positions, while heavy and civil engineering and nonresidential building added 3,700 and 3,100 jobs, respectively.
The construction unemployment rate decreased to 3.5% in May. Unemployment across all industries remained unchanged at 4.2%.
“The nonresidential construction segment has now added jobs at over twice the pace of the broader economy during the past 12 months,” said ABC Chief Economist Anirban Basu. “This hiring has been aided by softness in the residential segment, which lost over 7,000 jobs in May, freeing up workers for nonresidential contractors. Even so, the industrywide unemployment rate fell to an exceptionally low 3.5% in May, indicating that the labor supply remains unusually tight.
“Despite healthy nonresidential hiring, the broader industry has added just 25,000 jobs from January to May,” said Basu. “That marks the slowest five-month employment growth since 2020 and provides a clear indication that high interest rates, tight lending standards and policy uncertainty are weighing on industrywide momentum. Of course, contractors remain broadly optimistic in the face of those headwinds, according to ABC’s Construction Confidence Index, with a majority of contractors expecting their staffing levels to increase over the next six months.”
Press Release from Associated General Contractors of America (AGC)
Increases in Nonresidential Construction Employment were Tempered by Declines in Residential Construction Jobs; Average Hourly Earnings Up 4.7 Percent as Unemployment Rate Falls to 3.5 Percent
Construction sector employment increased by 4,000 positions in May as rising wages enabled the industry to add workers more rapidly than other sectors, according to an analysis of new government data the Associated General Contractors of America released today. Association officials noted that the industry has been adding jobs each month for over a year, but the increases have slowed amid recent market uncertainty.
“Nonresidential construction firms added employees in May for the 13th month in a row,” said Ken Simonson, the association’s chief economist. “However, constant changes in tariffs and other policies that are affecting the cost and demand for construction have led to a significant slowdown in hiring.”
Construction employment in May totaled 8,314,000, seasonally adjusted, an increase of 4,000 from April. Headcount rose by 126,000 jobs or 1.5 percent during the past 12 months, topping the 1.1 percent growth rate in total nonfarm payroll employment. However, the sector’s rate of growth was markedly slower than the 2.8 percent increase in construction employment recorded a year earlier.
Nonresidential construction firms added 11,300 workers in May, including 4,500 among specialty trade contractors, 3,100 in nonresidential building construction, and 3,700 in heavy and civil engineering construction. Residential construction employment offset those gains, declining by 7,400 jobs, as residential specialty trade contractors lost 11,000 positions while homebuilders and other residential building construction firms added 3,600 workers.
Average hourly earnings for production and nonsupervisory employees in construction—including most onsite craft workers and many office staff—increased 4.7 percent over the year to $37.13. That gain exceeded the 4 percent rise in pay for such workers in the overall private sector.
The unemployment rate among workers with recent construction experience fell to 3.5 percent in May, down from 3.9 percent a year earlier. A separate BLS report released earlier this week showed the job openings rate in construction declined to 2.9 percent in April, the lowest April level since 2020. The hiring rate inched up to 4.2 percent, while the layoff rate rose slightly to 2.1 percent. The data suggest that contractors are holding onto existing workers even as they scale back on new hiring, Simonson noted.
Association officials said the more federal officials can do to provide certainty about tariff rates, tax levels and federal spending priorities, the more developers are likely to proceed with stalled projects. They urged the administration to continue negotiating trade deals to eliminate tariff uncertainty, and for the Senate to pass the tax bill, noting that both would help ease investor and developer concerns.
“Construction firms continue to hire and boost wages, but the pace of growth has slowed as demand for certain types of projects cools,” said Jeffrey D. Shoaf, the association’s chief executive officer. “As federal officials provide more certainty about tariffs, taxes and investment levels, demand for projects is likely to rebound.”
