The Building Tradesman Newspaper

Friday, November 16, 2018

Hopefully, just a little dip for Michigan construction

By The Building Tradesman

Over the past few years, Michigan has enjoyed strong construction employment and has typically been among the leaders among the states in job growth in that sector.

But construction is a notoriously fickle industry - and evidence of this surfaced in September when Michigan experienced among the steepest month-to-month drops in industry employment compared to other states. According to an Oct. 19 report issued by the Associated General Contractors, Michigan lost 2,100 jobs, or 1.2 percent of its workforce, between August and September 2018 - the highest loss of jobs in the country among the states. 

Happily, it wasn't a historically large drop, the fundamentals of the state and federal economy are still good, and perhaps time will show that Michigan's drop was just an aberration. Indeed, over the 12-month period between September 2017 and September 2018, Michigan enjoyed a strong gain of 11,200 construction jobs, a 6.8 percent increase, ranking us No. 15 in employment gains among the states.

"Construction activity is expanding nearly everywhere, as only three states experienced a decline in construction employment over the past year," said AGC chief economist Ken Simonson. "These results show that contractors remain upbeat about demand for projects going forward. However, further employment gains may be difficult, given low unemployment in most states and an inadequate pipeline for training future construction workers."

A national look at employment figures released Nov. 2 by the Bureau of Labor Statistics and analyzed by the AGC found U.S. construction employment increased by 30,000 jobs in October and by 330,000 jobs over the past year, topping 7.3 million for the first time since April 2008.

Overall U.S. construction employment totaled 7.31 million in October, a gain of 4.7 percent over the prior 12 months. Employment in residential construction—comprising residential building and specialty trade contractors—grew by 16,600 jobs for the month and 143,500 jobs over the past 12 months, a 5.3 percent increase. Employment in nonresidential construction—including building, specialty trades, and heavy and civil engineering construction—grew by 13,500 jobs in October and 187,200 jobs during the past year, a 4.4 percent increase.

The unemployment rate for job seekers with construction experience in October was 3.6 percent, down from 4.5 percent in October 2017.

"Job gains remain strong and well balanced between residential and nonresidential construction," said Simonson. "Contractors are raising pay faster than at any time since the recession to attract workers from other industries as well as new entrants."

Hourly earnings in the construction industry averaged $30.21 in October, an increase of 3.9 percent from a year earlier—the steepest one-year rise since June 2009. The AGC reported that average hourly earnings in construction are now 10.7 percent higher than the average for all nonfarm private-sector jobs, which rose 3.1 percent in the past year, to $27.30. Factor in the nation's 2.3 percent inflation rate, and it is a significant drag on the benefit of the wage hikes.