Construction Employment Increases, but Shortages Loom

Construction employment increased by 5,000 jobs in April 2017 to the highest level in more than nine years amid strong demand for new construction services, according to an analysis of new government data by the Associated General Contractors of America. However, AGC officials cautioned that a shortage of available qualified workers likely limited the number of new jobs added last month.

“Construction firms continued adding new jobs at a faster rate than the broader economy during the past year as demand for their services remains strong,” said Stephen E. Sandherr, the association’s chief executive officer. “But many firms would likely have added even more new workers if only they could find enough qualified people to bring on board.”

In April, construction employment totaled 6,877,000, an increase of 5,000 from the March total and an increase of 173,000 or 2.6 percent from a year ago. The year-over-year growth rate was almost double the 1.6 percent rise in total nonfarm payroll employment, Sandherr noted. The sector’s unemployment rate is now 6.3 percent, up slightly from 6 percent a year ago.

Residential construction—comprising residential building and specialty trade contractors—added 900 jobs in April and is up by 109,300, or 4.2 percent, compared to a year ago. Nonresidential construction (building, specialty trades, and heavy and civil engineering construction) employment increased by 3,200 employees in April and 63,500 employees, or 1.5 percent, over 12 months. However, employment among nonresidential specialty trade contractors declined by 5,100 during the past month.

Association officials noted that average construction hourly earnings are up 2.1 percent compared to a year ago, and construction workers now make $28.55 per hour on average.  Construction pays 9 percent more, per hour, than the average non-farm job in the United States, which pays $26.19 on average per hour. The number of unemployed construction workers grew, however, from 530,000 in April 2016 to 585,000 last month, as more former construction workers attempted to return to the sector.

Construction officials said construction labor shortages were becoming more severe in many parts of the country after years of under-investment in career and technical education programs, which used to be called vocational education. They urged Congress and the Trump administration to enact a measure to increase funding, and flexibility, for the Perkins Act, which provides federal funds for career and technical education. And they urged state and local leaders to make it easier for construction firms and local associations to set up regional recruiting and training programs.

“It is time for our elected officials to start signaling to students that high-paying construction jobs should be on the menu of possible career choices,” said Sandherr. “The best way to send that signal is to provide the funding and flexibility to set up programs that expose more students to the opportunities that exist in construction careers.”