According to data released today by the US Bureau of Labor Statistics, the national construction industry gained 19,000 jobs on net in July.
Key Takeaways
- The construction industry gained 19,000 jobs on net in July. Year-over-year, industry employment has risen by 198,000 jobs.
- Nonresidential construction employment increased by 10,600 positions on net, with gains in two of the three subcategories.
- "The construction industry continues to add workers at a steady clip as demand for many types of construction remains strong. Firms are boosting pay to cope with tight labor market conditions, which is bringing more former workers back into the job market."
Press Release from Associated Builders and Contractors, Inc (ABC)
ABC: Nonresidential Construction Employment Increases in July
WASHINGTON, Aug. 4—The construction industry added 19,000 jobs on net in July, 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 expanded by 198,000 jobs, an increase of 2.5%.
Nonresidential construction employment increased by 10,600 positions on net, with growth in two of the three subcategories. Nonresidential building added 10,500 positions, while heavy and civil engineering added an additional 2,200 jobs. Nonresidential specialty trade lost 2,100 jobs on net.
The construction unemployment rate rose to 3.9% in July. Unemployment across all industries declined from 3.6% in June to 3.5% last month.
“The economy is slowing, and inflation remains problematic,” said ABC Chief Economist Anirban Basu. “While many economists have reversed their predictions of a near-term recession and conclude that the Federal Reserve will be able to engineer a soft landing, today’s report is a reminder that risks remain. Not only is the economy slowing, but wage pressures remain. Accordingly, the war on excess inflation has not yet been won, which means that the Federal Reserve may not be done raising rates.”
“That said, nonresidential construction contractors continue to expand their payrolls,” said Basu. “General and public works contractors collectively hired thousands of people in July. However, weakness in several commercial real estate segments may help explain job losses among nonresidential contractors last month. Nonetheless, construction worker wages continue to grow rapidly in the context of structural skills shortages. According to data from the ADP Pay Insights report, construction workers who stayed at their job saw a 6.4% wage increase over the past year, or more than twice the rate of inflation.”
“ABC’s Construction Confidence Index indicates that contractors will collectively continue to expand staffing for the rest of 2023,” said Basu. “That will presumably keep upward pressure on industry wages even if the broader economy continues to soften.”
Press Release from Associated General Contractors of America (AGC)
Construction Employment Reaches 7,791,000 in July as Data Shows Firms Can’t Find Enough Workers to Replace Retiring Workers, Association Officials Call for New Investments in Construction Education
The construction industry added 19,000 jobs in July even as the sector’s unemployment rate increased, according to an analysis of new government data the Associated General Contractors of America released today. Association officials noted that tight labor conditions are bringing more previously employed construction workers back into the job market as firms continue to boost pay levels.
“The construction industry continues to add workers at a steady clip as demand for many types of construction remains strong,” said Stephen E. Sandherr, the association’s chief executive officer. “Firms are boosting pay to cope with tight labor market conditions, which is bringing more former workers back into the job market.”
Construction employment in July totaled 7,971,000, seasonally adjusted, an addition of 19,000 compared to June. The sector has added 198,000 jobs or 2.5 percent during the past 12 months. Nonresidential construction firms—nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—added 10,600 employees (3.1 percent) in July. Meanwhile, employment at residential building and specialty trade contractors grew by 7,800 (1.8 percent).
The unemployment rate among jobseekers with construction experience rose from 3.5 percent in July 2022 to a still-low 3.9 percent. A separate government release earlier this week reported there were 378,000 openings at construction firms on the last day of June, close to the record high for June set in 2022 and indicating that demand for workers remains strong.
Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—jumped by 5.8 percent over the year to $34.24 per hour. Construction firms in July provided a wage “premium” of just over 18 percent compared to the average hourly earnings for all private-sector production employees.
Association officials said that labor shortages in construction threaten to undermine new federal investments in infrastructure, semiconductor chip plant and green energy construction. They urged federal officials to boost funding for construction education and training programs, noting the federal government currently spends five times as much encouraging students to go to college as it does on career and technical education programs.
“Unless federal officials begin to narrow the funding gap between college prep and career training the construction industry will continue to struggle to find workers,” said Sandherr. “It is great that federal officials want to invest in construction projects, they also need to invest in construction workforce development.”
