Approximately 19,000 jobs were added to the construction industry in July, according to analysis of recently released federal data by both the Associated General Contractors of America and the Associated Builders and Contractors.
On a year-over-year basis, industry employment has expanded by 198,000 jobs, an increase of 2.5%.
“The construction industry continues to add workers at a steady clip as demand for many types of construction remains strong,” said Stephen E. Sandherr, AGC’s chief executive officer. “Firms are boosting pay to cope with tight labor market conditions, which is bringing more former workers back into the job market.”
Construction employment in July totaled 7,971,000, seasonally adjusted, an addition of 19,000 compared to June. The sector has added 198,000 jobs or 2.5% during the past 12 months.
Nonresidential construction employment increased by 10,600 positions on net, with growth in two of the three subcategories. Nonresidential building added 10,500 positions, while heavy and civil engineering added 2,200 jobs. Nonresidential specialty trade lost 2,100 jobs on the net.
Meanwhile, employment at residential building and specialty trade contractors grew by 7,800.
In conjunction with the added jobs, the unemployment rate among jobseekers with construction experience rose from 3.5% percent in July 2022 to a still-low 3.9% in July 2023. percent. Across all industries, unemployment declined from 3.6% in June to 3.5% last month.
“The economy is slowing, and inflation remains problematic,” said ABC Chief Economist Anirban Basu.
Although some economists have reversed their predictions of a near-term recession and conclude that the Federal Reserve will engineer a soft landing, he says the latest data suggests otherwise.
“Not only is the economy slowing, but wage pressures remain,” Basu said.
Over the past 12 months, average hourly earnings for production and nonsupervisory employees in construction, which applies to most onsite workers as well as many office workers, jumped by approximately 5.8% to $34.24 per hour.
Construction firms in July provided a wage “premium” of just over 18% compared to the average hourly earnings for all private-sector production employees.
“Accordingly, the war on excess inflation has not yet been won, which means that the Federal Reserve may not be done raising rates,” Basu added.
A separate government release reported there were approximately 375,000 openings at construction firms on the last day of June, close to the record high for June set in 2022.
Per the association analysis, industry job openings declined by 5,000 last month and are down 9,000 from the same time last year.
“Some will focus on the fact that construction job openings declined in June,” Basu said, noting that he believes the real story is that despite the interest rate hikes and tighter credit conditions, the number of unfilled jobs remains at historic highs.
He noted that with a plurality of contractors indicating that they intend to increase staffing levels over the next six months, that will presumably keep upward pressure on industry wages even if the broader economy continues to soften.
In addition, Basu said many contractors will continue to report that their leading challenge is the retention and recruitment of highly trained workers.