The U.S. construction industry has added jobs for three consecutive months, with 19,000 new jobs added in November, according to the analysis of U.S. Bureau of Labor Statistics data by Associated Builders and Contractors.
Industry employment is up by 2.4 percent on a year-over-year basis, faster than the overall economy’s 1.6 percent job growth rate, according to the data. ABC officials said construction industry employment growth would likely be higher if more suitably skilled or trainable workers were available to fill job openings, however.
“The demand for construction talent was strong before the election, and the outcome has improved the near-term outlook for private and public construction activity,” said ABC chief economist Anirban Basu. “The implication is that demand for construction workers is positioned to remain high, which will translate into gradual reduction in industry employment and significant wage pressures.”
Basu added that the industry is already seeing evidence of these wage pressures today.
“Construction firms in the nation’s hottest markets, including New York, Seattle and Miami, report that in certain occupational categories, compensation is rising at a 10 percent per annum pace or more,” he said. “This appears to be particularly true for construction superintendents and managers.”
According to the data, the construction unemployment rate has remained unchanged at 5.7 percent in November, while the unemployment rate for all U.S. industries fell to 4.6 percent — the lowest rate since mid-2007. The labor force lost 226,000 workers in November, but is still 2 million people larger than it was in November 2015.
“Next year is shaping up to be a good one for both residential and nonresidential construction segments. Of the two branches of the industry, nonresidential likely offers the larger upside,” Basu said. “An infrastructure-led stimulus package would largely be oriented around nonresidential activities. Moreover, in certain markets, there is evidence that the apartment market is approaching saturation. Expected increases in interest rates next year would also tend to hit certain residential activities (e.g., single-family construction) more forcefully.”