A Sustainable Workforce Starts With You

AGC Data DIGest: February 1-4, 2022

Construction employment, seasonally adjusted, totaled 7,523,000 in January, a decline of 5,000 from the downwardly revised December total, according to AGC’s analysis of Bureau of Labor Statistics (BLS) data posted today. The January total was an increase of 163,000 (2.2%) year-over-year (y/y) from January 2021 but remained 101,000 (-1.3%) below the pre-pandemic peak in February 2020. Residential construction employment, comprising residential building and specialty trade contractors, rose by 4,400 in January, putting the total 112,000 (3.8%) higher than in February 2020. Nonresidential construction employment—building, specialty trades, and heavy and civil engineering construction—slipped by 9,000 and remains 213,000 (-4.6%) below the February 2020 level. Nonresidential employment has regained only 67% of the jobs it lost between February and April 2020, compared to 87% for total nonfarm payroll employment and 124% for residential construction. A total of 709,000 former construction workers were unemployed in January, a drop of 229,000 (-24%) y/y. The industry’s unemployment rate declined from 9.4%, not seasonally adjusted, in January 2021 to 7.1% last month. Individuals are counted as unemployed only if they have “actively looked for work in the prior four weeks.” The fact that the number of unemployed workers decreased more than construction employment increased over the past 12 months suggests that construction workers are either finding jobs in other sectors or dropping out of the workforce, at least temporarily.

Average hourly earnings for “production and nonsupervisory employees” in construction (mainly, hourly craft workers) increased by 5.8% y/y to $31.44, seasonally adjusted, in January 2022, BLS data posted today showed. The increase was the steepest in the 15-year history of the series. However, the average for the overall private sector rose 6.9% y/y to $26.61. Although the average for construction tops the all-private average by 16.8%, this “premium” has narrowed steeply from an average premium of 20-23% annually from 2005 to 2019. Since the pandemic began, other sectors have raised starting wages sharply, offered signing and retention bonuses, and--for some jobs--flexible hours or work locations, inducements that are not possible for onsite construction jobs. These conditions imply construction firms are likely to have a harder time attracting and retaining workers or will have to raise pay even more.

There were 273,000 job openings in construction, not seasonally adjusted, at the end of December, a y/y increase of 29%, BLS reported on Tuesday in its latest Job Openings and Labor Turnover Survey (JOLTS) release. Hires totaled 220,000, a 10% decline y/y. The excess of openings over hires implies the industry would have hired at least twice as many workers if they had been available.

Construction spending totaled $1.64 trillion in December at a seasonally adjusted annual rate, up 0.2% from November and 9.0% y/y from December 2020, the Census Bureau reported on Tuesday. For the year, spending climbed 8.2% from 2020. Private residential construction spending increased 1.1% for the month, 15% y/y, and 23% for the year (with single-family spending up 33% for the year; multifamily, 16%; and owner-occupied improvements, 13%). Private nonresidential construction spending was nearly level for the month and rose 9.1% y/y but declined 2.3% for the full year from 2020. The largest private nonresidential segment in 2021—power—rose 0.1% for the month but declined 1.8% for the year (including electric power, -0.9% for the year, and oil and gas field structures and pipelines, -4.9%), followed by commercial, up 0.1% for the month and 5.0% (including warehouse, up 16% for the year, and retail, -8.1%); manufacturing, down 1.9% for the month but up 8.5% for the year; and office, up 0.7% for the month but down 6.3% for the year. Lodging had the largest full-year decrease, -32%. Public construction spending slumped 1.6% for the month, 2.9% y/y, and 4.2% for the full year. The largest public segment, highway and street construction, inched up 0.1% for the month and 0.2% for the year. Public education construction skidded 1.4% for the month and 7.6% for the year. Public transportation construction declined 3.0% from November and 5.9% for the year.

Construction employment, not seasonally adjusted, rose from December 2020 to December 2021 in 231 (65%) of the 358 metro areas (including divisions of larger metros) for which BLS posts construction employment data, fell in 76 (21%) and was unchanged in 51, according to an analysis AGC released on Wednesday. (BLS reports combined totals for mining, logging, and construction in most metro areas, to avoid disclosing data about industries with few employers; AGC assumes the construction-only changes in these areas match the combined change.) The largest loss again occurred in the Nassau County-Suffolk County, N.Y. division (-5,700 combined jobs, -7%), followed by New York City (-4,200 jobs, -3%) and Baltimore-Columbia-Towson, Md. (-3,800 jobs, -5%). Evansville, Ind.-Ky. again experienced the steepest percentage decline (-18%, -1,700 combined jobs), followed by Napa, Calif. (-15%, -600 combined jobs) and Anchorage, Alaska (-14%, -1,400 construction jobs). Houston-The Woodlands-Sugar Land added the most jobs (8,800 construction jobs, 4%), followed by the Chicago-Naperville-Arlington Heights division (6,500 construction jobs, 5%) and the Los Angeles-Long Beach-Glendale division (6,300 construction jobs, 4%). Sioux Falls, S.D. had the highest percentage gain (24%, 2,100 combined jobs), followed by Beaumont-Port Arthur, Texas (18%, 3,000 combined jobs) and Atlantic City-Hammonton, N.J. (18%, 900 combined jobs). Seven areas set new lows for December and 57 set new highs, in series dating in most cases to 1990.