Report: Construction Employment is Stalling


In a new analysis by the Associated General Contractors of America of new government data, the association found that construction employment gained 2,000 jobs between March and April.

As the labor market continues to send contractors scrambling for workers, the AGC is urging Washington officials to address the short- and long-term shortage with expanded work permits and asks that investments in career education, training and apprenticeship programs be increased.

“The pause in employment gains last month most likely signifies a shortage of qualified workers, rather than any slowdown in demand for projects,” said Ken Simonson, AGC’s Chief Economist. “In fact, job openings in construction hit an all-time high at the end of March, while the industry’s unemployment rate was the lowest ever recorded for April.”

At the end of March, there were 415,000 construction-industry job openings, a jump of 69,000 (20%) from March 2021. The month hike marked the largest total for any month since the series was inaugurated in 2000.

According to the latest report, however, the unemployment rate among jobseekers with construction experience dropped just over 3% from 7.7% in April 2021 to 4.6% last month, the lowest April rate since the series launched. The number of unemployed construction workers fell by 304,000 or 40% to 464,000, a 22-year low for April.

The report went on to note that total construction employment inched up by 2,000 employees to 7,628,000 in April. Employment in residential construction rose by 3,800 workers, including 2,500 employed by homebuilders and multifamily general contractors and 1,300 at residential specialty trade contractors.

For the first time in eight months, nonresidential construction firms employment dipped by 2,000. According to the report, losses were limited to nonresidential specialty trade contractors, which shed 6,400 employees. General building contractors added 3,900 workers, while heavy and civil engineering construction firms added 500 employees.

The March to April construction employment statistics are as follows:

  • Nonresidential increased from 7,626,000 to 7,628,000;
  • Nonresidential Building increased from 807,500 to 811,400;
  • Nonresidential Specialty Trade Contractors decreased from 2,614,100 to 2,607,700;
  • Heavy & Civil increased from 1,068,700 to 1,069,200;
  • Residential increased from 3,135,900 to 3,139,700;
  • Residential Building increased from 893,100 to 896,600; and
  • Residential Specialty Trade Contractors increased from 2,242,800 to 2,243,100.

The latest construction employment table can be viewed here.

“With an overall unemployment rate approaching all-time lows, it is clear that employers in general--and construction firms in particular—need more foreign-born workers immediately,” said Stephen E. Sandherr, AGC’s Chief Executive Officer. “It is also vital to provide more opportunities for American students and workers to gain construction skills through a range of career education, training, and apprenticeship programs.”

Association officials said demand for construction workers remains strong and will grow further as funds are awarded from the recently enacted bipartisan infrastructure law.

To meet the demand, the association is calling for an immediate expansion of work permits for foreign-born workers. AGC has also asked Congress and the Biden administration to add funding for career and technical education and to support a wider range of apprenticeship and training opportunities.

As a response to the data, the Associated Builders and Contractor’s Chief Economist Anirban Basu said, “Based on ABC’s Construction Confidence Index, contractors collectively expect to hire staff during the months ahead. Many construction firms report operating at capacity. Hiring is a mechanism to expand that capacity. But with the cost of capital, materials and labor rising, demand for private construction services could soften next year. The risk of recession continues to rise.”

Recent Job, Wage Growth

For the month of February, the construction industry reportedly witnessed a 40-year high in terms of growth rates in both nonsupervisory positions and wage increases.

According to the U.S Bureau of Labor Statistics, the construction industry added 60,000 jobs on net last month—marking the recovery of virtually all 99% of the jobs lost during the early stages of the COVID-19 pandemic. Currently, construction industry employment (both residential and nonresidential) is 7.6 million, according to the National Association of Home Builders.

In taking a closer look at the February numbers, nonresidential construction employment increased by 29,400 positions, with all three subsectors experiencing growth, and is up 3.9% over the past twelve months. The residential sector added 31,000 and is up 4.5% since February 2021.

The number of unemployed jobseekers with construction experience shrank by 26% over the past year, from February 2021 to 677,000 in February 2022.

In a recent report by Business Insider, construction wages were up 6% higher than February 2021, further intensifying competition. According to AGC, the industry average of $31.62 per hour for such workers exceeded the private sector average by 17%, while the average for the entire private sector climbed even more in February—6.7% year-over-year.

Simonson noted that the year-over-year jump is the largest 12-month increase since December 1982 and primarily affects “production and nonsupervisory employees.”

Regardless of what appeared to be positive outlooks, industry officials reported that the progress was not enough, as the construction sectors would still need hundreds of thousands of additional experienced workers over the next several years to complete Bipartisan Infrastructure-funded projects, in addition to satisfying the continued demand for homebuilding and private nonresidential structures.

At the end of February, ABC estimated that the construction industry would need to attract nearly 650,000 additional workers on top of the normal pace of hiring in 2022 to meet the demand for labor.

Based on historical Census Bureau Job-to-Job flow data, an estimated 1.2 million construction workers will leave their jobs to work in other industries in 2022. It is expected that this will be offset by an anticipated 1.3 million workers who will leave other industries to work in construction.

In 2023, it is anticipated that the industry will need to bring in 590,000 new workers in order to meet industry demand—presuming that construction spending growth slows next year.

Some months earlier, in September, the U.S. DOL’s Bureau of Labor Statistics also reported an uptick in construction employment, with firms hiring 22,000 new employees.

The report also revealed that construction’s jobless rate of 4.5% had slightly improved from the previous month’s 4.6% figure. Despite the increase in workers, however, the industry has yet to reach pre-pandemic levels and currently sits 201,000 employees below its February 2020 numbers.

At the time, the ABC reported that the nonresidential construction industry had recovered 81.9% (912,000) of its jobs. Nonresidential construction employment increased by 18,600 positions on net, with all three subcategories showing gains for September, while nonresidential specialty trade contractors added 11,400 jobs and nonresidential building and heavy and civil engineering employment rose by 4,100 and 3,100 positions, respectively.

In the residential sector—which includes building contractors, homebuilders and residential specialty trades—employment witnessed the addition of 3,600 workers over the course of the same month.

The AGC also weighed in on the report, noting that nonresidential construction was affected by the widespread supply chain problems, which were causing owners already uncertain about future demand for commercial space to delay or even cancel some projects.


Tagged categories: Associated Builders and Contractors Inc. (ABC); Associated General Contractors (AGC); Business conditions; Business matters; Commercial contractors; Contractors; Economy; General contractors; Good Technical Practice; Industrial Contractors; Labor; NA; North America; Painting Contractors; Program/Project Management; Projects - Commercial; Residential contractors; Worker training; Workers

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