In September, the US construction industry saw a noteworthy uptick in employment, with an additional 11,000 jobs added to its workforce. This growth occurred against a backdrop of remarkably low unemployment rates within the sector, prompting contractors to offer higher wages compared to other industries. These insights stem from an analysis of recent government data conducted by the Associated General Contractors of America.
Despite the positive employment trend, officials from the association highlighted a decline in the number of individuals engaged in nonresidential construction projects during the same month. This decline can be attributed to the ongoing challenges faced by firms in their quest to recruit sufficient skilled laborers in the midst of a tight labor market.
Ken Simonson, the association's chief economist, commented on this situation, stating, "Construction firms have plenty of projects, but a dip in nonresidential employment last month shows how hard it has been to find enough skilled workers. Job openings remain stubbornly high, even though the industry has been raising hourly pay at an elevated rate."
To delve into the specifics, the construction industry's total employment in September, after seasonal adjustments, reached 8,014,000, marking an increase of 11,000 jobs, or 0.1 percent, compared to August. Over the past year, the sector added a significant 217,000 jobs, representing a growth rate of 2.8 percent. Within this context, residential building and specialty trade contractors contributed 12,600 employees in September, and over the year, they added 55,300 jobs, accounting for a 1.7 percent increase. Conversely, employment at nonresidential construction firms—encompassing nonresidential building and specialty trade contractors, as well as heavy and civil engineering construction firms—declined by 1,300 positions for the month, though it still increased by 161,600 jobs, or 3.5 percent, since September 2022.
The unemployment rate for jobseekers with construction experience in September stood at a remarkably low 3.8 percent, marking one of the lowest rates for September in the data's 24-year history. A separate government report released earlier in the week revealed that there were 360,000 job openings in the construction industry at the end of August, reaching one of the highest totals for August in the historical record. This serves as further evidence of the challenges contractors face when seeking qualified workers.
Average hourly earnings for production and nonsupervisory employees in the construction sector, covering both onsite craft workers and office staff, witnessed a year-over-year increase of 5.5 percent, reaching $34.54 per hour. Notably, construction firms offered a wage "premium" of nearly 19 percent when compared to the average hourly earnings for all private-sector production employees in August.
Officials from the association emphasized the need to expose more individuals to construction as a viable career path. Despite its attractive earning potential and the absence of a college degree requirement, the construction profession remains largely underexplored by potential future workers. They urged public officials to increase investments in programs designed to introduce individuals to careers in construction. Furthermore, they called on Congress and the Biden administration to find avenues for more individuals with construction skills to legally enter the country and participate in the profession.
Stephen E. Sandherr, the association's chief executive officer, pointed out, "Allowing more people into the country to lawfully work in construction will provide short-term relief for labor shortages without creating a new segment of the population that is dependent on public support. At the same time, we need to show more American workers how much they can earn, and how little they will need to spend, to begin careers in construction."
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