Construction adds 28,000 jobs in August; unemployment falls to 4.7 percent

WASHINGTON — National construction employment rebounded in August, adding 28,000 net new jobs on a seasonally adjusted basis, according to a September 1 release from the U.S. Bureau of Labor Statistics. It was the best month for job gains in construction since February, according to analysis by Associated Builders & Contractors.

Construction employment declined by 3,000 net positions in July. Nonresidential construction added 14,300 net new jobs in August after losing 6,200 in July, according to government data.

“Construction employment grew across every industry sector in August,” said Jack Jacobson, spokesperson for Construction Employers of America. “This is the first month in some time we’ve realized sustained job increases throughout the construction industry. While the growth is certainly encouraging, these gains are unlikely to be sustainable without congressional intervention in the form of a major infrastructure package.”

Specialty trade construction grew by over 15,000 positions, continuing to lead employment in the construction sector, Jacobson said. Nonresidential specialty construction grew by nearly 4,000 jobs; residential specialty construction increased by 11,500 positions.

The construction industry unemployment rate, which is available only on a non-seasonally adjusted basis, fell two-tenths of a percentage point and now stands at 4.7 percent. This represents the first time during the past five years that the industry’s unemployment rate declined in August. The unemployment rate for all U.S. industries inched up to 4.4 percent.

“Data work in strange ways,” said ABC Chief Economist Anirban Basu. “In July, overall national job growth remained strong, while construction statistics sagged. One month later, the construction jobs picture looks much brighter, while headline numbers for the broader economy appear a bit less benign.

“Rather than focusing on oscillations in monthly data, look at the broader picture,” said Basu. “Here’s what we know: The U.S. labor market remains strong, as evidenced by enormous numbers of job openings, and construction activity remains robust, especially in certain private segments. This helps explain the 44,800 net new positions added by nonresidential specialty trade contractors during the past year. There is even evidence of growing demand for public construction services, with the heavy and civil engineering segment adding another 6,600 net new positions in August and more than 45,000 during the past year.

“The result is that demand for construction workers continues to expand despite occasional contradictory information emerging from monthly statistics,” said Basu.  “Accordingly, construction firms are increasing their scramble rate for employees, driving up hourly compensation in the process. Leading indicators suggest that overall construction activity will continue to expand during the months ahead. Among these are the Architecture Billings Index and ABC’s Construction Backlog Indicator.

“Hopefully more Americans will enter the labor market and join apprenticeship or other training programs to participate in the nation’s steadily improving construction economy,” said Basu. “Not only will this make it easier for firms to deliver construction services on time and on budget, but it will also expand the nation’s tax base, shrink demand for public assistance, expand the middle class and accelerate economic growth.”

The Construction Employers Association urged Congress to put together a Federal infrastructure package.

“When Congress invests in infrastructure, it creates jobs in every single state,” said Jacobson. “We hope the House and Senate will make the infrastructure plan they promised last year a reality. Smart tax reform can also spur construction job growth by driving down costs and bringing back home significant overseas corporate earnings to be invested in American infrastructure.”

CEA’s seven employer associations include FCA International, International Council of Employers of Bricklayers and Allied Craftworkers, Mechanical Contractors Association of America, National Electrical Contractors Association, Sheet Metal & Air Conditioning Contractors National Association, Signatory Wall and Ceiling Contractors Alliance, and The Association of Union Constructors.