The Building Tradesman Newspaper

Friday, September 06, 2019

Construction activity: 'No sign of letting up'

By Marty Mulcahy, Editor

Michigan was one of 40 states that added construction jobs between July 2018 and July 2019, according to the latest analysis of U.S. construction employment by the Associated General Contractors of America, released Aug. 16.

With 80 percent of states consistently adding construction jobs on a month to month basis this year, it's a sign of prosperity in the industry. But it's also putting a strain on construction schedules in an industry that has grown accustomed to tight completion deadlines. 

Three separate construction managers we have talked to in the past several weeks around Michigan said they simply don't have the manpower in some trades to complete their projects when promised. And that's a scenario that's reflected in jobsites around the country.

“Demand for projects, and the workers to build them, shows no sign of letting up in most states, and contractors continue to increase headcount when they can find qualified workers,” said Associated General Contractors Chief Economist Ken Simonson. “But job openings at the end of June were the highest ever for June, suggesting that contractors are struggling to find all the workers they need in many states.”

Michigan barely stayed on the positive side of the employment ledger from June to July 2019, adding only 100 construction jobs during that month. And over the prior 12 months, our state added 2,200 construction jobs - also a positive, but relatively tame 1.3 percent increase. Overall, Michigan employed 172,900 construction workers in July 2019.

Texas added the most construction jobs over the year (48,400 jobs, 6.6 percent), followed by California (37,100 jobs, +4.3 percent), Florida (21,300 jobs, +3.9 percent), and Arizona (17,400 jobs, +11 percent).

Among the 10 states that shed construction jobs over the latest 12 months, Louisiana lost the largest number and percentage of construction jobs (-12,100 jobs, -7.9 percent). Other states with large job losses include Ohio (-2,900 jobs, -1.3 percent), South Carolina (-2,800 jobs, -2.7 percent), and Massachusetts (-2,500 jobs, -1.6 percent).

AGC officials said overall unemployment rates are at all-time lows in many states. “Contractors would gladly add even more high-paying middle-class jobs if they could only find more qualified workers to bring on board,” said Stephen E. Sandherr, the association’s CEO. “The federal government should do more to build awareness of the opportunities and make it easier to prepare and attract more people into construction. Such steps will provide significant benefits to the broader economy.”

Meanwhile, the Dodge "Momentum Index" for U.S. construction from Dodge Data & Analytics released Aug. 7 showed the industry retreating 4.6 percent in July from June. The Aug. 7 update to the index shows a monthly measure of initial nonresidential building projects in the planning. After peaking in July 2018, the Momentum Index has generally receded, and was down in August 11.6 percent from the year prior.