Construction Employment Increases by 44K in January, 142K Over 12 Months

Construction employment increased by 44,000 jobs in January and by 142,000 over the past 12 months, as the industry’s unemployment rate hit a new January low, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that the employment gains are happening at a time when most construction firms expect demand for all types of construction to remain strong.

 

“Construction accounted for one-fifth of all jobs added in January, even though the industry makes up less than 5% of total employment,” said Ken Simonson, the association’s chief economist, noting that the industry’s increase was the largest in a year. “Some of the gains may reflect unusually mild winter weather in much of the nation, but contractors are unquestionably optimistic about the year and plan to continue hiring.”

 

Total construction employment climbed to 7,593,800, the highest level since August 2007, with gains in both residential and nonresidential employment. The 1.9% growth in construction employment between January 2019 and January 2020 outpaced the 1.4% increase in total nonfarm payroll employment. Average hourly earnings in construction – a measure of all wages and salaries – increased 2.9% over the year to $31.19. That figure was 9.7% higher than the private-sector average of $28.44.

 

Simonson observed that both the number of unemployed workers with recent construction experience – 515,000 – and the unemployment rate for such workers – 5.4% – were the lowest ever for January in the 21-year history of those series. He said these figures are consistent with reports from contractors as part of the association’s annual outlook that experienced construction workers are hard to find.

 

Association officials said construction firms report they plan to continue adding jobs in 2020 amid what it expected to be strong demand for all types of commercial construction services. But they cautioned that 81% of contractors also report having a hard time finding enough qualified workers to hire. These workforce shortages could impact construction schedules and costs, the officials warned. They called on Congress and the Trump administration to boost funding for career and technical education, expand Pell Grant eligibility and enact immigration reform to help address labor shortages that threaten the sector’s future growth.

 

“As these figures make clear, the construction sector is making an outsized contribution to overall economic growth,” said Stephen E. Sandherr, the association’s CEO. “But if construction firms can’t find enough people to hire to keep pace with demand, then future economy growth could be at risk.”