|The construction industry added 25,000 jobs on net in May, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has increased by 192,000 jobs, an increase of 2.5%.
Nonresidential construction employment expanded by 22,100 positions on net, with growth in all three subcategories. Heavy and civil engineering added 10,700 positions, while nonresidential specialty trade and nonresidential building added 7,200 and 4,200 jobs, respectively.
The construction unemployment rate dropped to 3.5% in May. Unemployment across all industries increased from 3.4% in April to 3.7% last month.
“Based on recent data, simply determining what is happening right now in the economy is difficult,” said ABC Chief Economist Anirban Basu. “While the establishment survey indicates that the nation added 339,000 jobs in May, smashing through consensus expectations, the household survey indicates that America lost 310,000 jobs for the month. Since economists generally place far more emphasis on the establishment survey, today’s data will generally be viewed as further indication of ongoing economic momentum.
“That momentum is especially apparent in the nation’s nonresidential construction segment,” said Basu. “The construction industry unemployment rate is now below the economywide unemployment rate, and there are plenty of available, unfilled construction jobs. Among the principal takeaways is that there will continue to be substantial upward pressure on construction worker compensation during the months ahead.
“At the same time, there remain signs of weakness in the economy,” said Basu. “Manufacturing appears to be in its own recession. A number of state economies show evidence of commonplace definitions of recession. With credit conditions worsening, interest rates set to remain higher for longer, growing concerns regarding the health of commercial real estate and more consumers struggling to pay monthly bills in an inflationary environment, the onset of economywide recession later this year remains a possibility. Developer-driven construction activity is especially at risk of a sharp downturn at some point over the next year.”