September construction employment, hourly wages climb; August job openings hold, spending rises
Friday, October 6, 2023
by: Ken Simonson, Chief Economist AGC of America

Section: Advocacy News

Construction employment, seasonally adjusted, totaled 8,014,000 in September, a gain of 11,000 from August and 217,000 (2.8%) year-over-year (y/y), according to AGC’s analysis of data the Bureau of Labor Statistics (BLS) posted today. The y/y growth rate outpaced the 2.1% increase in total nonfarm payroll employment. Residential construction employment (at residential building and specialty contractors) rose by 12,600 in September and 55,300 (1.7%) y/y. Nonresidential construction employment (at building, specialty trade, and heavy and civil engineering construction firms) dipped by 1,300 for the month but increased by 161,600 (3.5%) y/y. Seasonally adjusted average hourly earnings for production and nonsupervisory employees in construction (craft and office) rose 5.5% y/y to $34.54 per hour. The “premium” for nonsupervisory construction workers rose to 18.9% over the private sector average of $29.06, still considerably below the average premium in 2000-2019 of 21.5%. The number of unemployed jobseekers with construction experience rose from 346,000, not seasonally adjusted, in September 2022 to 392,000 and the unemployment rate for such workers rose from 3.4% to a still-low 3.8%.

There were 360,000 job openings in construction, not seasonally adjusted, at the end of August, nearly matching the August 2022 total of 362,000, BLS reported on Tuesday in its monthly Job Openings and Labor Turnover Survey (JOLTS) release. Hires for the full month totaled 361,000, a decrease of 27,000 (-7.0%) y/y. The relative stability of these numbers, as well as the increase in construction spending (see below), suggests that the slight drop in nonresidential employment in September is more likely a reflection of the difficulty in filling positions than a weakening of demand.

Construction spending (not adjusted for inflation) totaled $1.98 trillion in August at a seasonally adjusted annual rate, up 0.5% from July and up 5.5% y/y, the Census Bureau reported on Monday. However, without a deflator, it is impossible to say how much of the y/y gain is in units vs. price. Private residential construction increased 0.6% for the month, with single-family homebuilding up 1.7% (the fourth monthly gain in a row), multifamily construction spending up 0.2%, and owner-occupied improvements up 0.3%. Private nonresidential construction spending rose 0.3% for the month. The largest private nonresidential segment (based on the seasonally adjusted August rate)—manufacturing construction—rose 1.2% (including computer/electronic/electrical, up 1.9%, and chemical and pharmaceutical, up 1.0%). Commercial construction fell 0.9% (consisting of warehouse, down 1.2%; retail, down 1.6%; and farm, up 3.2%). Power rose 0.4% (with electric power up 0.8% and oil and gas field structures and pipelines down 3.0%). Private office and data center construction increased 0.2%. Public construction spending rose 0.6%. The largest public segment, highway and street construction, climbed 0.4%. Public education edged up 0.2%. Public transportation construction rose 1.3%. 

Construction employment, not seasonally adjusted, rose from August 2022 in 223 (62%) of the 358 metro areas (including divisions of larger metros) for which BLS posts construction employment data, fell in 79 (22%), and was unchanged in 56, according to an analysis AGC released on Wednesday. (AGC treats as construction-only the totals for metros in which BLS reports only combined totals for mining, logging, and construction.) The top three metros for jobs added were again the Dallas-Plano-Irving division (15,100 combined jobs or 10%), New York City (11,000 combined jobs, 8%), and Portland-Vancouver-Hillsboro, Ore.-Wash. (9,200 construction jobs, 11%). The largest percentage gain was in Baton Rouge, La. (16%, 7,100 construction jobs), followed by 11% gains in Portland-Vancouver-Hillsboro; Wilmington, Del.-Md.-N.J. (2,000 combined jobs); Middlesex-Monmouth-Ocean, N.J. (4,800 combined jobs); and Cheyenne, Wyo. (400 combined jobs). The largest loss occurred in Houston-The Woodlands-Sugar Land (6,800 construction jobs, -3%), followed by Nassau County-Suffolk County, N.Y. (-5,200 combined jobs, -6%) and the Miami-Miami Beach-Kendall division (-4,400 construction jobs, -8%). Kankakee, Ill. again experienced the largest percentage job loss (-13%, -200 combined jobs), followed by Binghamton, N.Y. (-9%, -400 combined jobs); Pittsfield, Mass. (-9%, -200 combined jobs); and Miami-Miami Beach-Kendall.