Construction Employment Hits Four-Year High

Industry’s unemployment rate not affected by government shutdown.

November 18, 2013
CDR Staff
Forecasts & Statistics

Construction employment hit a 50-month high as employers added 11,000 jobs in October and the industry unemployment rate fell to 9 percent. October marked the fifth consecutive month of sector job gains, according to an analysis of new government data by the Associated General Contractors of America (AGC), Arlington, Va.

Association officials say the new employment figures indicate there was little nationwide short-term impact from the federal government shutdown and cautioned that skilled worker shortages are likely to grow as the industry continues to expand.

“After some very dramatic declines and years of sluggish growth, the construction industry is slowly adding jobs,” says Ken Simonson, the association's chief economist. “The federal government shutdown did not appear to have undermined construction job growth in the short term, probably because it did not significantly impact projects that were already underway.”

Construction employment totaled 5.83 million in October, an increase of 185,000 from a year earlier, and is now at the highest level since August 2009. Simonson says the October increase was the fifth consecutive month of construction job growth. Meanwhile, the unemployment rate for workers actively looking for jobs and last employed in construction declined from 11.4 percent in October 2012 to 9 percent last month.

Nonresidential construction firms added 6,600 new jobs in October while residential firms added 4,800 jobs. Within the nonresidential sector, heavy and civil engineering firms – which are most likely to perform federal construction work – added only 200 jobs. The modest increase for that sector was likely caused by declining public sector demand and not the federal shutdown, says Simonson.

As the industry continues to add new jobs, many firms report they are having a hard time finding qualified workers to fill key positions. The number of unemployed construction workers has declined at a faster rate than the industry has added jobs as laid-off workers either retire or found work in other sectors. During the past three years, the number of unemployed construction workers has declined by 712,000 while construction firms have added 323,000 new jobs, according to Simonson.

AGC officials say another reason construction employers were worried about finding enough qualified workers is the limited number of career and technical education and training programs that exist. They say many school districts have eliminated vocational education programs during the past several decades. The AGC says it is preparing a series of proposals to increase the number of career and technical education and training opportunities that it will release later this year.

“While we have a long way to go before construction employment hits pre-recession levels, we need to take steps now to keep up with growing demand,” says Stephen E. Sandherr, the AGC’s chief executive officer. “The last thing we want is for the lack of qualified workers to undermine the sector’s recovery.”