Construction
employment expanded by 52,000 net new jobs in January, according to an Associated Builders and Contractors (ABC) analysis of data recently
released by the U.S. Bureau of Labor Statistics (BLS). Industry employment is
up by 338,000 net jobs on a yearly basis, which represents an increase of 4.7
percent, ABC says. Nonresidential construction employment grew by 28,600 net
new positions on a monthly basis, although the nonresidential building
sub-sector lost 800 net positions.
Construction
industry unemployment rose to 6.4 percent, up 1.3 percentage points from
December but 0.9 percentage points lower than in January 2018. The nationwide
unemployment rate inched up a tenth of a percentage point to 4 percent. BLS
also revised its estimate for December construction employment to 28,000 net
new jobs, down from 38,000.
“Today’s
numbers are especially important for construction industry leaders to
consider,” says Anirban Basu, ABC’s chief economist. “Because of the federal
government shutdown and the market volatility that characterized last year’s
final quarter, confidence among consumers and many business operators had been
shaken. This is a far cry from a year ago when many economic actors were upbeat
after the brilliant financial market performance in 2017 and the passage of tax
reform late that year. Today’s jobs report counters concerns that confidence
had fallen far enough to jeopardize broader economic momentum and that the
federal government shutdown could impact the January employment numbers in a
meaningful and negative manner.
“Instead,
today’s employment numbers were exceptional,” says Basu. “Not only did the
nation manage to add more than 300,000 net new jobs during the initial month of
2019, labor force participation rose further, indicating that more people are
being persuaded to participate in the strongest labor market in a generation.
What’s more, construction job totals surged higher, with nonresidential
construction adding 28,000 on a seasonally adjusted basis in January. This
comports neatly with elevated backlog and the notion that a strong economy
continues to create fresh opportunities for contractors.
“Today’s
data also indicates that contractors will continue to wrestle with their most
profound challenge: the lack of sufficient numbers of suitably skilled
workers,” Basu continues. “This strongly suggests that wage and cost pressures
facing the industry will persist well into 2019 and likely beyond. Today’s
numbers also help to dampen any emerging concerns regarding a recession in the
near term.”