The construction sector experienced a decline in employment for the third consecutive month in August, with a loss of 7,000 jobs, according to an analysis by Associated Builders and Contractors (ABC) based on data from the U.S. Bureau of Labor Statistics. Over the past year, however, total industry employment increased by 58,000 positions, representing a 0.7% rise.
Within nonresidential construction, employment dropped by 1,200 jobs overall. The nonresidential building segment lost 3,300 positions and nonresidential specialty trade contractors saw a decrease of 200 jobs. Heavy and civil engineering was the only subcategory to report gains, adding 2,300 jobs during the month.
The construction unemployment rate fell to 3.2% in August. In contrast, unemployment across all industries rose slightly from 4.2% in July to 4.3% last month.
“The construction industry has now lost jobs in each of the past three months,” said ABC Chief Economist Anirban Basu. “Industrywide employment is up by just 6,000 positions since December, and every subsegment except for heavy and civil engineering lost jobs in August. Despite these job losses, construction labor shortages appear to be worsening as immigration policy weighs on the supply of workers; the construction unemployment rate fell to 3.2% in August, matching the lowest level ever recorded.
“Construction industry data have been particularly downbeat since March,” said Basu. “With materials prices rising and construction spending shrinking, it’s hardly a surprise that the industry’s workforce is contracting. Despite these troubling signs, contractors remain optimistic about their sales over the next six months, according to ABC’s Construction Confidence Index. While that may reflect the notion that weak labor market data will translate into accelerated rate cuts, there is no guarantee that a lower federal funds rate will translate into lower borrowing costs given the current state of the bond market.”
