US Construction Industry Adds 19,000 Jobs in July

According to analysis by the Associated Builders and Contractors (ABC) of US Bureau of Labor Statistics nonfarm payroll data for July, the construction industry added a net 19,000 jobs. Year-over-year, construction industry employment increased 2.5%, or 198,000 positions.

Nonresidential construction employment increased by 10,600 net positions, with growth in two of three subcategories. Nonresidential building added 10,500 net positions, while heavy and civil engineering added an additional 2,200 jobs. Nonresidential specialty trades lost a net 2,100 jobs during July.

The construction unemployment rate rose to 3.9%. Unemployment across all industries declined from 3.6% in June to 3.5% in July.

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

“The economy is slowing, and inflation remains problematic. While many economists have reversed their predictions of a near-term recession and conclude that the Federal Reserve will be able to engineer a soft landing, today’s [construction employment] report is a reminder that risks remain. Not only is the economy slowing, but wage pressures remain. Accordingly, the war on excess inflation has not yet been won, which means that the Federal Reserve may not be done raising rates.

That said, nonresidential construction contractors continue to expand their payrolls. General and public works contractors collectively hired thousands of people in July. However, weakness in several commercial real estate segments may help explain job losses among nonresidential contractors last month. Nonetheless, construction worker wages continue to grow rapidly in the context of structural skills shortages. According to data from the ADP Pay Insights report, construction workers who stayed at their job saw a 6.4% wage increase over the past year, or more than twice the rate of inflation.

ABC’s Construction Confidence Index indicates that contractors will collectively continue to expand staffing for the rest of 2023. That will presumably keep upward pressure on industry wages even if the broader economy continues to soften.”