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Construction Employment Rebounds with Strong September Report

Lack of Appropriately Skilled Labor Is Biggest Concern for U.S. Construction Firms


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WASHINGTON, D.C., Oct. 7—The construction industry rebounded in a meaningful way in September by gaining 23,000 net new jobs on a monthly basis after losing 5,000 net jobs in August, according to an analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors (ABC). Despite the broader industry gains, the nonresidential sector added just 2,700 net new jobs for the month, while the residential sector added 15,700 new positions. The heavy and civil engineering subsector added 4,300 net new jobs after losing 23,200 positions over the previous five-month period.

“Recent reports indicate that wage growth in America has accelerated significantly over the past year,” said ABC Chief Economist Anirban Basu. “Not only has this helped to support consumer spending, it appears to be inducing more people into America’s labor force. Despite recent job growth in construction and the balance of the economy last month, both industry and national unemployment rose. For operators of construction firms, this should be considered good news as survey data indicate that the lack of appropriately skilled labor represents the biggest concern for U.S. construction firms by far.

“Though construction added jobs in September, not every segment experienced increased hiring activity,” said Basu. “Driven by strong multifamily segments and an improving single family housing market, job growth in residential construction was robust. However, nonresidential employment growth was far less impressive, and nonresidential building construction actually declined. This may be part of an emerging pattern. The most recent Architecture Billings Index also revealed some nascent weakness in commercial construction activity. There may be many reasons for this, including seasonal fluctuations. However, there are also data indicating that credit available to commercial real estate is beginning to tighten up. It also remains difficult for many mixed use developers to line up enough office tenants to allow projects to move forward.

“All told, today’s data should be viewed favorably,” concluded Basu. “America’s consumer-led recovery continues to produce enough jobs to sustain itself, and chances of near-term recession remain quite low.”

The construction industry unemployment rate inched a tenth of a percentage point higher in September and now stands at 5.2 percent. The unemployment rate for all industries rose by the same amount, reaching an even 5 percent. This is likely attributable to the 444,000 new persons in the labor force. The labor force has expanded by roughly 2.1 million workers through the first three quarters of 2016. The last time the labor force grew that much through the first nine months of the year was 2000, the penultimate year of the dot-com bubble.

September Construction Employment

 
 
 
 
Additional ABC Economic Analysis
 
Construction Spending Construction Employment Producer Price Index Economic Growth (GDP)
 
 
ABC Economic Reports
 
Construction Backlog Indicator (CBI) Construction Confidence Index State-Level Reports
 
 
Associated Builders and Contractors (ABC) is a national construction industry trade association established in 1950 that represents nearly 21,000 members. Founded on the merit shop philosophy, ABC and its 70 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org.

 
   
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