concrete pouring
Employment increased by 11,300 in March among nonresidential firms in the U.S.
Image supplied by iStock.

AGC reports increased activity in early 2022

Trade group points to labor and materials shortages as barriers to growth momentum.

April 5, 2022

The Arlington, Virginia-based Associated General Contractors of America (AGC) says the construction sector in the United States added 19,000 jobs in March, while project spending rose for the 12th straight month this February.

The AGC, in its analysis of government data, also is warning that further gains may stall unless the supply of workers and materials improves. They are urging elected and appointed officials to end tariffs on key materials and broaden training and education opportunities for construction careers.

“Construction is contributing significantly to the expansion of employment and the overall economy,” says Ken Simonson, the association’s chief economist. “But the sector is facing growing challenges in terms of filling job openings, obtaining materials, and keeping up with soaring wages and prices.”

Industry employment totaled more than 7.6 million in March, surpassing the pre-pandemic peak set in February 2020 for the first time, says AGC.

Residential building and specialty trade contractors added 7,600 employees in March, and the sector’s employment exceeded the February 2020 level by 161,000, or 5.4 percent. Employment increased by 11,300 for the month among nonresidential firms (building, specialty trade, and heavy and civil engineering construction contractors), but remained 157,000 or 3.4 percent shy of the February 2020 mark.

Despite the recent employment increases, construction job openings at the end of February totaled 364,000, which AGC calls the largest February total, by far, in the 22-year history of that data point. Openings exceeded the 342,000 workers hired in February, implying that contractors wanted to hire more than twice as many workers as they were able to, says Simonson.

Construction spending increased for the 12th consecutive month in February to $1.7 trillion, a rise of 0.5 percent for the month and 11.2 percent year-over-year. All three major subsectors posted year-over-year increases.

Private residential construction rose 1.1 percent in February and 16.6 percent over 12 months. Private nonresidential spending edged up 0.2 percent for the month and 9.7 percent since February 2021. Public construction rose 1.5 percent from a year earlier despite slipping 0.4 percent from January to February.

Association staff members say the industry also will need to obtain materials on a more timely basis (in addition to hiring more workers) in order to execute projects that will soon be funded by the federal infrastructure law.

AGC says it is urging Congress and the Biden administration to: end lumber, steel, and other tariffs; increase funds for career and technical education; and support a wider range of apprenticeship and training opportunities.

“Contractors are doing their part to add employees and complete projects,” says Stephen E. Sandherr, the association’s CEO. “But there won’t be enough materials or workers to go around if officials in Washington fail to allow more goods into the U.S. and prepare more job seekers for these opportunities.”