The construction industry added 19,000 employees in September as it boosted wages for hourly workers at the fastest rate in 40 years, according to an analysis by the Associated General Contractors of America of new government data. Association officials said that even with the pay raises, many contractors are still having a difficult time finding qualified workers to hire.
“Contractors are raising pay faster than other sectors and are hiring more workers,” says Ken Simonson, the association’s chief economist. “But job openings going into September were at record levels and the industry’s unemployment rate last month was close to an all-time low, suggesting that jobs will remain hard to fill.”
The data breakdown
Total construction employment moved up by 19,000 employees to 7,719,000 in September, an increase of 292,000 or 3.9 percent from a year earlier. Nonresidential firms added 13,100 employees for the month, including 2,400 at general building contractors and 11,200 at nonresidential specialty trade contractors, while employment dipped by 500 employees at heavy and civil engineering construction firms. Residential specialty trade contractors added 6,500 employees but residential general contractors, homebuilders and multifamily building contractors, shed 100 workers.
Average hourly earnings for production and nonsupervisory employees in construction, craft and office workers, increased 6.7 percent from September 2021 to last month, the largest gain in 40 years, the economist noted. That outpaced the 5.8 percent increase for the overall private sector.
There were 437,000 construction industry job openings at the end of August, an increase of 47,000 or 12 percent from a year earlier. The figure is the largest August total since that series began in 2000, Simonson added, citing government data released on Tuesday.
The unemployment rate among jobseekers with construction experience declined from 4.5 percent in September 2021 to 3.4 percent last month, close to the all-time low in the 23-year history of the data, the economist observed. The number of unemployed construction workers fell from a year earlier by 98,000 or 22 percent to 346,000, suggesting there are few experienced jobseekers left to hire.
Impact of labor shortages
Association officials cautioned that construction labor shortages were making it harder and costlier for firms to improve infrastructure and repair areas damaged by natural disasters. They called on Congress and the Biden administration to boost funding for career and technical education programs. They also called for measures to allow more people with construction skills to enter the country and work in the sector.
“Labor shortages are undermining infrastructure investments and making it difficult for communities to rebuild,” says Stephen E. Sandherr, the association’s chief executive officer. “But letting more people with construction skills into the country with work visas and boosting funding for construction education and training programs will help now and for the long-term.”
