The Building Tradesman Newspaper

Friday, May 18, 2018

News Briefs

By The Building Tradesman

Nice hike for construction wages

Wage levels in the U.S. construction industry seem to finally be following the law of supply and demand.

The Associated General Contractors of America reported on May 4 that hourly earnings in the construction industry averaged $29.63 in April, an increase of 3.5 percent from a year earlier. A year ago, AGC officials noted that average construction hourly earnings were up 2.1 percent compared to earnings in April 2016, with construction workers making $28.55 per hour on average.

The April 2018 figures for the construction industry put the average hourly earnings in construction 10.4 percent higher than the average for all non-farm private-sector jobs, which rose 2.6 percent in the past year, to $26.84.

"Many firms are boosting pay and taking other steps to compete for a relatively small pool of available, qualified workers to hire," said Stephen E. Sandherr, the AGC's chief executive officer. "While these steps appear to be luring more construction workers back to the job market, firms report they would hire even more workers if they could find enough qualified candidates."

A decade after the Great Recession, annual construction wage hikes, which typically languished in the 2 percent range employment, are finally reflecting an industry that overall has more openings than workers. U.S. construction employment totaled 7.17 million in April, a gain of 17,000 for the month and 257,000, or 3.7 percent, over 12 months. Construction employment is at the highest level since June 2008. 

Association officials pointed out that the year-over-year growth rate in industry jobs was more than triple the 1.1 percent rise in total nonfarm payroll employment.

"It is time to start showing more of our young adults that high-paying careers in construction should be on the list of professions they consider," Sandherr said. "Not every student needs to amass a mountain of college debt just to be able to make mediocre wages working in a fluorescent-lit cube farm."

And construction work in the U.S. looks to be strong as the weather warms. The Dodge Momentum Index jumped 6.1 percent in April to 163.0 (2000=100) from the revised March reading of 153.7. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.

Jobless rate at 3.9% in April 

WASHINGTON (PAI - The U.S. unemployment rate was 3.9 percent in April, from 4.1 percent in March, the first decline in seven months, the Bureau of Labor Statistics said May 4. Businesses created 168,000 new jobs in April, while governments shed 4,000. 

There were 6.34 million unemployed in April, 239,000 fewer than in March.

Incomes barely budged, too, BLS said. The average hourly wage barely moved, up four cents per hour, to $26.84.

“Nominal wage growth continues to fall short, rising only 2.6 percent over the year,” said Economic Policy Institute senior analyst Elise Gould.

It rose three cents an hour in the lowest-paying sector, bars and restaurants, to $15.83 That’s also the sector where workers have the least hours on the job (26.1).
Factories added 24,000 jobs, to 12.665 million. Big gains were in machinery (+8,400) and fabricated metal products, such as steel (+3,900). Some 521,000 factory workers (3.3 percent) were jobless.

Construction added 17,000 jobs, to 7.17million. Most of the new jobs were at specialty trade contractors (+11,100). There were 623,000 jobless construction workers (6.5 percent). 

As usual, the lowest-paying areas of the service sector led the way in job gains, with health care adding 24,400 jobs, bars and restaurants 14,800 and temps 10,300. Higher-paying services lost jobs, such as in mass transit and railroads (-800 each) and trucking (-5,500).
Overall, service firms claimed to add 119,000 jobs in April.