The latest report from the Associated Builders and Contractors (ABC) highlighting construction growth last month is welcome news and a good sign that the construction industry continues to recover.
ABC’s Chief Economist Anirban Basu says that nonresidential construction added nearly 5,000 jobs in November and that the outlook remains positive.
The U.S. construction industry overall added 20,000 jobs in November, with nonresidential construction contributing 4,900 of them, according to the Bureau of Labor Statistics preliminary estimate released Dec. 5, ABC reported.
Also notable is Basu’s point that the “greatest constraint on nonresidential job growth may no longer be a lack of demand for construction services, but rather a lack of supply of sufficiently skilled workers.”
Basu says that a growing demand for human capital coupled with tighter labor markets strongly suggests that industry wage pressures will expand in 2015, “perhaps to the extent that margins will be rendered too thin for many firms, even in the face of rising demand for services.”
He also points out that while the national construction unemployment rate expanded from 6.4 percent to 7.5 percent on a non-seasonally adjusted basis in November, it is primarily due to seasonal factors. “The construction unemployment rate has historically expanded during the colder months of the year, and November’s figure should not be seen as a cause for concern,” Basu says.
According to ABC, here is a snapshot of how construction employment for the November and the past year breaks down:
·Nonresidential building construction employment fell by 2,400 jobs for the month but is up by 9,500 jobs, or 1.4 percent, since November 2013.
·Residential building construction employment expanded by 3,400 jobs in November and is up by 47,300 jobs, or 7.5 percent, on an annual basis.
·Nonresidential specialty trade contractors added 7,300 jobs for the month and employment in that category is up by 47,400 jobs, or 2.2 percent, from the same time one year ago.
·Residential specialty trade contractors gained 13,300 jobs in November and have added 75,500 jobs, or 4.8 percent, since November 2013.
·The heavy and civil engineering construction segment lost 1,300 jobs in November and job totals are up by 33,200, or 3.7, percent on a year-over-year basis.
Although the market has improved, I know the construction industry has still not rebounded to previous pre-recessions levels. However, I think we are all dealing with what is “the new normal,” and I’m glad to see the positive outlook in these latest numbers.