Construction Employment Now at Highest Level since February 2009 as Sector Continues to Recover, But Worker Shortages Threaten to Undermine Future Growth, Officials Caution

Construction firms added 31,000 workers in October as the industry's unemployment rate declined to 6.2 percent amid robust demand for construction, according to an analysis by the Associated General Contractors of America. Association officials noted that construction employment is now at the highest level since February 2009 as the sector continues to recover from the downturn.

"The industry continues to recover while the hiring slowdowns it experienced during the summer were prompted more by labor shortages than they were any slump in demand," said Ken Simonson, the association's chief economist. "Construction firms appear to have had an easier time finding workers in October than they did during the summer."

Construction employment totaled 6,434,000 in October, the most since February 2009, and is up by 233,000 jobs compared to a year ago, a 3.8 percent increase. Residential construction increased by 6,000 in October and by 99,100, or 4.2 percent, compared to a year ago. Nonresidential construction employers added 24,900 jobs for the month and 133,800 jobs compared to last October, a 4.5 percent increase.

The number of unemployed jobseekers in September who last worked in construction totaled 534,000, the lowest figure for October since 2006. The unemployment rate for such workers was 6.2 percent, the lowest October number since 2007. Meanwhile, Census Bureau data released on November 2 showed that the growth in construction spending accelerated to a seven-year high of 14.1 percent in the latest 12 months, September 2014 to September 2015.

The relatively large increase in construction employment follows several months where firms added relatively few employees, the construction economist said. He added the fact firms were able to expand their headcount by over 30,000 in October may indicate that more people are entering the construction labor market as firms focus on recruiting and boost compensation levels.

Simonson noted that construction wages have been consistently rising for the past four years and averaged $27.54 per hour in October, 9.3 percent more than the average for all nonfarm payroll employees. Average hourly earnings in construction increased 2.6 percent from October 2014 to October 2015, up from 2.4 percent one year earlier and 0.7 percent four years earlier.

Association officials said that despite the recent job gains, they remain concerned about the relative shortage of qualified construction workers as the current workforce ages and relatively few young people pursue careers in the construction industry. They noted that a key component of the association's Workforce Development Plan is designed to expose more high school and college-age students to career opportunities in construction and provide them with the basic skills they would need to begin working in the sector.

"While firms were able to find a larger number of workers this month than during the summer, the supply of qualified workers remains tight," said Stephen E. Sandherr, the association's chief executive officer. "It is time to start exposing more students to the fact they can make a very good wage and enjoy rewarding careers in construction."

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