Construction Jobs Growing at Twice the Rate of Total Nonfarm Jobs as Sector's Unemployment Rate Hits 10-Year March Low; Several Spending Segments Jump 20 Percent for the Year Despite Dip in Monthly Total
Apr 1, 2016 -- Construction employment rose sharply in March by 37,000 for the month and 301,000 for the year, while construction spending in February logged a solid year-over-year increase despite a dip compared with January, according to an analysis by the Associated General Contractors of America. Association officials said the new jobs and spending indicate that the industry is steadily expanding to meet growing demand.
"These two reports confirm that demand for construction is robust and well-balanced among residential, private nonresidential and public segments," said Ken Simonson, the association's chief economist. "Compared with the same month a year ago, the industry is adding workers at more than double the rate of the overall economy, and construction spending continues to rise at a double-digit pace."
Construction employment totaled 6,672,000 in March, the most since December 2008, and is up by 301,000 jobs compared to a year ago, a 4.7 percent increase. That rate of increase was more than double the 2.0 percent rise in total nonfarm payroll employment since March 2015. Residential construction—comprising residential building and specialty trade contractors—increased by 13,400 jobs in March and by 166,000, or 6.8 percent, compared to a year ago. Nonresidential construction—building, specialty trades, and heavy and civil engineering construction firms—added 23,900 jobs for the month and 134,800 jobs compared to March 2015, a 3.4 percent increase.
Meanwhile, the number of unemployed jobseekers in March who last worked in construction totaled 768,000, the lowest March total since 2001. The unemployment rate for such workers was 8.7 percent, a 10-year low for March.
Construction spending in February totaled $1.144 trillion at a seasonally adjusted annual rate, 0.5 percent below the upwardly revised January total but 10.3 percent higher than in February 2015, Simonson said. Private residential spending rose 0.9 percent for the month and 10.7 percent compared to February 2015. Spending on multifamily residential construction increased 0.9 percent for the month and 24.1 percent year-over-year, while single-family spending climbed 1.2 percent from January and 10.6 percent compared to February 2015.
Private nonresidential construction spending slipped 1.3 percent for the month but gained 10.6 percent from a year earlier. Simonson observed that nearly every segment increased from 12 months before, with gains of more than 30 percent each for private office and lodging construction and more than 20 percent for amusement and recreation and private educational construction.
Public construction spending declined 1.7 percent from a month before but rose 9.2 percent from 12 months earlier. Spending on highway and street construction—the biggest public segment—slipped 2.1 percent for the month, following an exceptionally large increase in January, but was up 24.5 percent compared to February 2015.
"Construction firms are finding a way to add staff to keep pace with growing demand for their services," said Stephen E. Sandherr, the association's chief executive officer. "But the pool of available experienced labor is small and getting smaller, which is why we will continue to push for measures to expand recruiting and training opportunities for future workers."