Construction Employment Growth Outpaces Overall Nonfarm Payrolls; Average Wages in Construction Rise to $37.83 an Hour as Labor Market Remains Tight Amid a Shrinking Pool of Authorized Workers
Construction employment increased by 28,000 positions in November, outpacing the rate of overall nonfarm payroll growth, according to an analysis of new government data the Associated General Contractors of America released today. Association officials noted that the construction sector continues to experience acute labor shortages as the pool of lawfully authorized workers continues to shrink.
“Construction employment rebounded in November and continued to grow faster than overall nonfarm payrolls,” said Macrina Wilkins, the association’s senior research analyst. “The underlying trends still point to steady demand for nonresidential construction, even as parts of the residential market remain soft.”
Construction employment in November totaled 8,332,000, seasonally adjusted, an increase of 28,000 from October. Over the past 12 months, industry employment increased by 58,000 jobs, or 0.7 percent, slightly exceeding the 0.6 percent year-over-year growth rate for total nonfarm employment.
Nonresidential construction firms continued to account for the bulk of employment gains. Nonresidential specialty trade contractors added 18,700 jobs in November, while nonresidential building construction added 5,100 jobs and heavy and civil engineering construction increased by 5,000 positions. In contrast, residential specialty trade contractors shed 3,700 jobs, offsetting a gain of 3,400 in residential building construction.
Average hourly earnings for production and nonsupervisory employees in construction rose to $37.83 in November, an increase of 4.3 percent over the past year, exceeding the 3.9 percent gain in private-sector wages overall and maintaining a wage premium of roughly 19 percent over the broader private sector. The unemployment rate for workers with recent construction experience was 3.9 percent in November, less than the overall unemployment rate, a sign that there are few experienced workers available to hire.
Association officials cautioned that month-to-month employment changes for October and November should be interpreted carefully, as the federal shutdown delayed data collection and increased the likelihood of future revisions. October employment estimates showed declines for both construction and total nonfarm payrolls.
The construction officials added that construction workforce shortages remain a significant challenge for many firms. They noted that since January, the pool of individuals lawfully authorized to work in the United States has shrunk by over 1.2 million, including many construction workers. They urged the administration and construction to look at ways to expand the construction workforce by investing in training and education programs and allowing more people to lawfully enter the country to work in the sector.
“The construction industry continues to be constrained by workforce shortages,” said Jeffrey D. Shoaf, the association’s chief executive officer. “Finding ways to expand the construction workforce will keep projects moving forward and boost the number of people working in rewarding construction careers.”