Data shows construction continues to make employment gains

The construction industry added 19,000 jobs on net in July, according to an Associated Builders & Contractors (ABC) analysis of data the U.S. Bureau of Labor Statistics released.

On a year-over-year basis, construction industry employment expanded by 198,000 jobs – an increase of 2.5 percent.

Nonresidential construction employment increased by 10,600 positions on net, with growth in two of three subcategories. Nonresidential building added 10,500 positions while heavy and civil engineering added an additional 2,200 jobs. Nonresidential specialty trade lost 2,100 jobs on net.

The construction unemployment rate rose to 3.9 percent in July, ABC adds. Unemployment across all industries declined from 3.6 percent in June to 3.5 percent in July.

“The economy is slowing, and inflation remains problematic,” says Anirban Basu, chief economist at ABC. “While many economists have reversed their predictions of a near-term recession and conclude that the Federal Reserve will be able to engineer a soft landing, today’s report is a reminder that risks remain. Not only is the economy slowing, but wage pressures remain. Accordingly, the war on excess inflation has not yet been won, which means that the Federal Reserve may not be done raising rates.

Still, Basu says nonresidential construction contractors continue to expand their payrolls.

“General and public works contractors collectively hired thousands of people in July,” he says. “However, weakness in several commercial real estate segments may help explain job losses among nonresidential contractors [in July]. Nonetheless, construction worker wages continue to grow rapidly in the context of structural skills shortages.”

ABC’s Construction Confidence Index indicates that contractors will collectively continue to expand staffing for the rest of 2023, Basu adds.

“That will presumably keep upward pressure on industry wages even if the broader economy continues to soften,” he says.