Construction Employment Increases in June; Unemployment Ticks Up Slightly but Remains Near Record Low

The Associated Builders and Contractors (ABC) on Friday (7-7-23) released its analysis of data released by the US Bureau of Labor Statistics (BLS) in regard to construction sector employment. Construction industry employment increased by 23,000 jobs in June. Year-over-year, employment has risen by 198,000, or 2.6%, to 7.947 million.

Nonresidential construction employment increased by a net 12,200 positions, with ABC reporting positive growth in two out of the three subcategories. Civil and heavy engineering combined added 7,300 positions, while nonresidential building added an additional 5,400 jobs. On the other hand, nonresidential specialty trade contractors shed 500 jobs.

The construction unemployment rate increased to 3.6%. Unemployment across all industries declined in June to 3.6%, down from May’s reading of 3.7%.

Adding additional background and his analysis to the report, ABC’s Chief Economist Dr. Anirban Basu said:

“Theory suggests that the roughly 500-basis point increase in the federal funds rate over the past year would weigh on the demand for construction workers, yet the industry continues to add thousands of jobs each month. Contractors have collectively added jobs in 15 of the past 16 months, and ABC’s Construction Confidence Index suggests they will continue to increase staffing levels through the remainder of the year.

The June jobs report, along with yesterday’s JOLTS data, confirm that labor shortages will continue to provide a stiff headwind to hiring. The construction unemployment rate inched up to 3.6% in June, but that’s still the second-lowest rate on record. Across all industries, unemployment remains near a 50-year low, and the prime age (24-54) employment-to-population ratio rose to the highest level since 2001. High interest rates and the cumulative effects of inflation will eventually catch up with the economy. For now, however, the labor market remains overheated.”