|The construction industry added 1,000 jobs on net in October, 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 risen by 266,000 jobs, an increase of 3.6%.
Nonresidential construction employment increased by 300 positions on net, with growth in only one of the three subcategories. Nonresidential building added 3,200 net new jobs, while nonresidential specialty trade and heavy and civil engineering lost 2,500 and 400 jobs, respectively.
The construction unemployment rate rose to 4.1% in October. Unemployment across all industries rose from 3.5% in September to 3.7% last month.
“The country’s job market remains strong, and that means we remain in a bad place because, in this economic environment, good news is bad news and vice versa,” said ABC Chief Economist Anirban Basu. “We can expect to hear many such ironic statements during the months ahead. A few days ago, we learned that America had 10.7 million available, unfilled jobs in September. More than 400,000 of these are construction industry job openings. Today we learned that employers continue to hire, with the overall economy adding 261,000 jobs in October.
“For inflation to return to its 2% target, the demand for labor needs to weaken,” said Basu. “We’re not there yet, which means that the current cycle of raising interest rates will continue. Among other things, that stands to weaken demand for construction services as borrowing costs ramp higher amid ongoing labor shortages and elevated materials prices. Due to those factors, the construction industry added just 1,000 net new jobs last month, the slowest growth since April.
“The good news is that bad news will eventually arrive,” said Basu. “As the economy slows further and recessionary conditions take hold, inflation will dissipate as demand for goods and services weakens. While it is unfortunate that economic stakeholders have to wait for bad news before good news arrives, contractors still have healthy backlogs, according to ABC’s Construction Backlog Indicator, and that will carry many through 2023 even if a recession arrives in America next year.”
|Visit abc.org/economics for the Construction Backlog Indicator and Construction Confidence Index, plus analysis of spending, employment, job openings, GDP and the Producer Price Index.
Associated Builders and Contractors is a national construction industry trade association established in 1950 that represents more than 21,000 members. Founded on the merit shop philosophy, ABC and its 68 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org.