The Building Tradesman Newspaper

Friday, April 19, 2019

U.S. construction moves past rough patch

By The Building Tradesman

The rough start to 2019 construction employment became a bit smoother in March.

Employment in the U.S. construction industry rose by 16,000 jobs in March, rebounding somewhat from a decline of 31,000 jobs in February. The better news is that overall from March 2018 to March 2019, U.S. construction employment rose by 246,000 jobs, or 3.4 percent.

The information was released April 5 by the Associated General Contractors of America using federal Bureau of Labor Statistics numbers.

"Construction employment rebounded in March, indicating that the dip in February was probably related to extreme weather conditions and not the beginning of a slump," said Ken Simonson, the AGC's chief economist. "In fact, the construction industry has added jobs at twice the rate of the overall economy in the past year."

The jobs news from the overall economy in March was also pretty good. After what the Economic Policy Institute (EPI) called a weak jobs gain "hiccup" in February, the U.S. experienced an overall 196,000 gain in jobs from February to March 2019, the Labor Department reported April 5.

"The better parts of February’s jobs report—low unemployment and near-healthy wage growth - were mostly replicated in March," the EPI's Josh Bivens said. "Unemployment in March stayed steady at 3.8 percent, and over the past 12 months average hourly earnings rose by 3.2 percent for all workers, and 3.3 percent for non-supervisory workers. 

"This is welcome, but not exceptional wage growth, and is actually a slight slowdown relative to recent months. There is definitely room for wage growth to shift into a higher gear before sparking fears of wage-driven price inflation. But March’s report seems to signal that, since the beginning of 2018, we have shifted into a period of notably better wage growth than any previous span of the current expansion."

Long-term, the construction industry is doing its part to bolster the U.S. economy. Overall U.S. construction employment totaled 7.47 million in March, and the month-to-month gain of 3.4 percent was double the 1.7 percent gain in total non-farm employment for the same period. Construction wages were barely outgained by the 3.3 percent increase in wages earned by the overall U.S. workforce over the past 12 months.

As we have reported, 2019 is expected to continue to be a strong year for U.S. construction. An AGC survey released in January said 79 percent of U.S. contractors expect to add employees in 2019. And more contractors than not expect to see an expansion of projects that are available to be bid this year. 

And the same old bugaboo, a shortage of U.S. construction workers, hasn't abated. The AGC's survey earlier this year found that 78 percent of U.S. contractors were having trouble filling some craft positions, and 68 percent said they expected that hiring would remain difficult or become harder.

"Contractors nationwide report difficulty finding enough workers to keep pace with the strong demand for projects," said Stephen E. Sandherr, the AGC's chief executive officer. "Expanding high school career and technical education programs will expose students to the rewarding career paths offered by high-paying construction jobs."