A bustling construction industry is responsible for the U.S.’ low unemployment rate, according to an analysis of government data by the Associated Builders and Contractors.
ABC says nonresidential construction added 11,800 jobs in December 2017 — almost 10 percent of the new U.S. jobs created that month. Construction overall added 30,000 jobs in December.
Nonresidential specialty trades such as sheet metal forming added an estimated 13,800 positions. Overall, construction employed 210,000 more people in 2017 than it did a year earlier.
The industry’s nonseasonally adjusted unemployment rate is 5.9 percent.
“Today’s overall job growth number fell short of expectations, but the construction employment numbers surprised to the upside,” said ABC chief economist Anirban Basu. “It is likely that some of this is due to ongoing rebuilding efforts after hurricanes and wildfires. We will have a better sense of this once state-level employment figures become available. To the extent that construction job growth, whether residential or commercial, is disproportionately concentrated in states like California, Texas and Florida beyond pre-disaster norms, one can infer that rebuilding efforts are responsible for at least some of the surge in construction job growth.
“That said, a strengthening U.S. economy is likely responsible for the bulk of construction job growth. Consumer and business confidence have been surging recently,” said Basu. “The recently passed tax cuts will add additional liquidity to the U.S. economy, which should translate into faster consumer and business spending growth. Positive wealth effects from housing and financial markets as well as an improving global economy are also helping to push the economy forward. Higher energy prices and bitterly cold temperatures are also stimulating investment among energy suppliers.”