This Is Weird

Aug. 11, 2015
Editor – GX – Arturo

The Associated General Contractors (AGC) of America has come out with the latest construction unemployment numbers and they’re looking pretty good. Construction unemployment has fallen to its lowest level in 14 years. This as construction employment in July has risen to its highest level since February of 2009. What’s weird is that AGC officials are expressing caution when reporting the numbers.

They feel that the shrinking pool of qualified labor may be having an effect on the construction industry’s ability to meet growing demand.

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The Association’s chief economist, Ken Simonson says, “It is encouraging to see construction employment rising again, but the industry could hire many more workers if they were available. The lack of experienced construction workers may be impeding the industry’s ability to start or complete new projects. The recent acceleration in construction spending may soon level off unless the sector can draw in more workers with the right skills.”

Simonson points out that job gains in the sector for the past five months have been intermittent and somewhat sluggish, even though there are signs that demand for construction is accelerating. “The latest Census Bureau data show the amount of construction spending is rising at the fastest rate since 2006, and there are several indicators—such as the steady increase in hiring of architects and engineers—that suggest demand for construction will remain strong, but contractors may have difficulty finding enough workers to take on all those projects.”

And here again we’re pointing to a shrinking pool of available skilled workers. It’s shrinking because aging workers are retiring, other construction workers who lost their jobs in the recession went on to other industries, and fewer high school graduates are choosing to pursue careers in the construction industry. There is now an obvious lack of high school level programs that expose students to construction as a potential career path.

Stephen Sandherr, the association’s chief executive officer, is reminding that the association’s Workforce Development Plan calls for increasing the number of career and technical education programs nationwide. He says, “”We are doing many students a real disservice by not telling them about how they can make a good living working in construction. The more options we give students, the more likely they are to succeed.”

Here are some numbers from the AGC to chew on:

Construction employment totaled 6,383,000 in July, the most since February 2009, but the total rose by only 6,000 in July and by an average of only 7,200 per month over the past five months, Simonson noted. The number of unemployed workers who reported last working in construction totaled 474,000, the lowest amount since 2001.

Overall construction employment rose by 6,000 from June to July, far below the monthly average of 19,250 between July 2014 and July 2015, Simonson noted. Meanwhile, employment at architectural and engineering services firms climbed by 3.6% since July 2014, suggesting that more workers are being hired to design future construction projects, the economist pointed out. Construction spending put in place—a measure of current industry activity—jumped 12% from June 2014 to June 2015, the Census Bureau reported on August 3.