Construction employment shifting, AGC economist says

The Bureau of Labor Statistics reported on July 7 that overall construction employment remains primarily unchanged for the fourth month in a row, with a seasonally adjusted total of 7.5 million.

Ken Simonson, chief economist for the Associated General Contractors of America, said the “tepid” construction job report reflects a mix of a growing nonresidential construction job market and a slowing residential job market.

“The seemingly stagnant job pool results from cross-cutting currents,” Simonson said. “Residential building and specialty trade construction employment fell by 25,000 since February, including a drop of 9,000 jobs just in June.”

Simonson added that nonresidential building and specialty trade contractors have gained 44,000 workers over the past four months, including 9,000 in June. Simonson said nonresidential builders want to hire more workers but claim they are having trouble finding qualified individuals.

The number of heavy and civil engineering construction jobs have dropped by 8,000 since February.

“The residential building and heavy construction figures have been somewhat distorted by ‘front-loading’ that occurred in January, when record warm and dry weather allowed hiring for outdoor work such as excavation and concrete pouring to be accelerated by several months,” Simonson said.

In order to look beyond this, June-to-June comparisons must be made, he said. The comparison shows overall construction employment has expanded at a 3.1 percent rate during the past 12 months.

“There is clearly a shift occurring in construction employment,” Simonson said. “Sectors such as manufacturing, energy and mining and hospitals are adding jobs and facilities, activity that generates nonresidential construction jobs.”

Meanwhile, Simonson said, single-family and condominium construction are cooling off, and employment in these areas will drop quickly once the backlog of current projects is finished.