Area Economy

Construction employment recovery is slow but steady

April 1, 2016
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The U.S. construction industry added 19,000 net new jobs in February according to an analysis of the U.S. Bureau of Labor Statistics monthly report.

Year-over-year, the industry has added 253,000 net new jobs, an increase of 4 percent. The nonresidential sector added only 2,800 net new jobs in February after adding 3,600 jobs in January (revised upward from 2,900).

Nonresidential specialty trade contractors lost jobs for the second consecutive month, while residential specialty trade contractors added 13,800 net new jobs in February — more than the other four subsectors combined. The civil and heavy engineering category continued its tepid growth, adding just 700 net new jobs for the month.

Though many contractors continue to report significant backlog, the broader macroeconomic data regarding construction do not reflect brisk industry recovery. Rather, the data are consistent with steady, ongoing recovery in both spending and employment.

Though the Department of Labor’s employment report will be viewed positively by most stakeholders in the economy, it was not a great report for nonresidential construction. The nonresidential specialty trade contractor subsector lost 1,500 jobs in February and has now lost jobs in two consecutive months.

This performance stands in contrast to the initial two months of 2015, when nonresidential specialty trade contractors collectively added 31,000 positions.

Despite this recent softness in the nonresidential employment data, recent nonresidential construction spending data were quite strong. There is no indication in the report that the ongoing nonresidential construction recovery is in any way jeopardized.

Undoubtedly, seasonal factors are at work, and it is likely the industry will see progress in the value of construction put in place, employment, profitability and wage growth.

The construction industry unemployment rate climbed to 8.7 percent in February, a 0.2 percent increase from January. The industry's unemployment rate has now increased by 3.2 percent since September 2015. The unemployment rate across all industries remained unchanged at 4.9 percent. Nonresidential building construction employment expanded by 4,300 jobs in February and is up by 14,100 jobs or 1.9 percent on a year-over-year basis.

  • Residential building construction employment expanded by 2,100 jobs in February and is up by 32,200 jobs or 4.7 percent on a year-ago basis.
  • Nonresidential specialty trade contractors lost 1,500 jobs for the month but employment in that category is up by 76,300 jobs or 3.3 percent from the same time one year ago.
  • Residential specialty trade contractors added 13,800 net new jobs in February and have added 122,900 jobs or 7.0 percent since February 2015.
  • The heavy and civil engineering construction segment gained 700 jobs in February and is up by 7,900 positions or 0.8 percent on a year over year basis.

Anirban Basu is chief economist of Associated Builders and Contractors.

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