Construction Employment Rises by 7K in September Amidst Tight Labor Market

Construction employment increased by 7,000 jobs in September and by 156,000, or 2.1%, over the past 12 months, while the number of unemployed jobseekers with construction experience reached a record low for September, according to an analysis of new government data by the Associated General Contractors of America. Association officials said the modest increase in employment likely reflects tight labor conditions and urged federal officials to increase funding for career and technical education and pass immigration reform.

“Contractors foresee plenty of projects to bid on, and nearly three-fourths of firms expect to add workers during the next twelve months, but most are finding it hard to find qualified workers to hire,” said Ken Simonson, the association’s chief economist, referring to the results of a survey the association released in late August. “That’s not surprising, given that the total unemployment rate hit a 50-year low in September—a sign that workers are hard to come by throughout the economy.”

Simonson observed that the 2.1% growth in construction employment between September 2018 and September 2019 was the slowest in more than six years but that the rate remained well above the 1.4% increase in total nonfarm payroll employment. There were 319,000 unemployed jobseekers who last worked in construction—an unemployment rate of 3.2% for such workers. Simonson noted those were the lowest September levels since the series began in 2000.

Average hourly earnings in construction—a measure of all wages and salaries—increased 2.2% over the year to $30.81. That figure was 9.7% higher than the private-sector average of $28.09, the association official noted. He added that two-thirds of firms responding to the association’s survey had raised base pay rates for hourly craftworkers in the past year because of difficulty in filling positions, while 58% of firms had done so for salaried workers. Many respondents also reported providing incentives, bonuses and larger contributions to benefit plans.

Association officials said the industry was taking a broad range of steps to cope with labor shortages, including boosting pay, expanding training programs and becoming more efficient. But they cautioned that labor shortages are still impacting construction schedules and costs. They urged Congress to pass measures to boost career and technical education and provide a way for more immigrants with construction skills to legally enter the country.

“Contractors are going to great lengths to recruit, prepare and hire new workers, but too few young adults know about the rewarding opportunities available to them in construction,” said Stephen E. Sandherr, the association’s CEO. “Getting federal and state officials to boost funding for career and technical education will create significantly more programs that allow a greater number of students to consider careers in the construction industry.”