News From the AGC of America: Construction Firms Add 23,000 Employees in September

Oct. 7, 2016

Construction employers added 23,000 jobs in September as employment in the sector hit the highest level since the end of 2008 amid strong demand for construction services, according to an analysis by the Associated General Contractors of America. Association officials noted that average hourly earnings for construction workers increased by 2.8 percent compared to 12 months ago as labor shortages continue to prove challenging for many firms.

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“Demand for construction remains quite strong but contractors continue to struggle to find qualified workers,” said Ken Simonson, the association’s chief economist. “The monthly declines the industry experienced during the summer were likely caused by worker shortages instead of shortages of work for many firms.”

Construction employment totaled 6,669,000 in September, an increase of 23,000 from August and 218,000 or 3.4 percent from a year ago. That is higher than at any point since December 2008 when there were 6,701,000 people working in construction. The annual rate of increase in construction employment was nearly twice as fast as the 1.7 percent increase for total nonfarm payroll employment. There were 474,000 unemployed jobseekers in September who last worked in the construction industry, the lowest total for September in 16 years, Simonson added.

As the available supply of workers continues to shrink, average hourly earnings, a measure of wages and salaries for all workers, increased 2.8 percent in construction over the past year to $28.30 in September, nearly 10 percent more than for all nonfarm jobs, the economist noted. For the private nonfarm sector, earnings rose 2.4 percent over the past 12 months to $25.79.

Residential construction—comprising residential building and specialty trade contractors—added 15,700 jobs in September and 146,000, or 5.9 percent, compared to a year ago. Nonresidential construction—building, specialty trades, and heavy and civil engineering construction firms—added 7,000 jobs for the month and gained 72,000 employees compared to September 2015, a 1.8 percent rise. There were year-over-year gains for all segments, but job losses from August to September among nonresidential building firms.

Association officials said they were encouraged by the new construction employment figures, but they cautioned that labor shortages remain significant and could impact future hiring levels. They urged members of the U.S. Senate to act on House-passed legislation to provide new flexibility and higher funding levels for career and technical education programs across the country.

“Just because contractors were able to find people to hire last month doesn’t mean the industry’s labor shortages are over,” said Stephen E. Sandherr, the association’s chief executive officer. “Senators can make it easier for schools to teach the skills local employers need so we can put more people to work in high-paying construction careers.”