Steel Markets

Construction Adds 30,000 Jobs in October; Hourly Pay Up 3.9%

November 3, 2018

Construction employment increased by 30,000 jobs in October and by 330,000 jobs over the past year, topping 7.3 million for the first time since April 2008, while the industry’s average pay jumped and unemployment decreased to a historic low, according to an analysis of new government data by the Associated General Contractors of America. Despite the steep gains in employment and pay, a recent survey by the association finds contractors continue to struggle to find qualified workers.

“Job gains remain strong and well balanced between residential and nonresidential construction,” said Ken Simonson, the association’s chief economist. “Contractors are raising pay faster than at any time since the recession to attract workers from other industries as well as new entrants, yet many firms report they continue to have difficulty filling positions.”

Construction employment totaled 7,318,000 in October, a gain of 4.7 percent over the past 12 months. Employment in residential construction—comprising residential building and specialty trade contractors—grew by 16,600 jobs for the month and 143,500 jobs over the past 12 months, a 5.3 percent increase. Employment in nonresidential construction—including building, specialty trades, and heavy and civil engineering construction—grew by 13,500 jobs in October and 187,200 jobs during the past year, a 4.4 percent increase, Simonson noted.

Hourly earnings in the industry averaged $30.21 in October, an increase of 3.9 percent from a year earlier—the steepest one-year rise since June 2009. Average hourly earnings in construction are now 10.7 percent higher than the average for all nonfarm private-sector jobs, which rose 3.1 percent in the past year, to $27.30. Meanwhile, the unemployment rate for jobseekers with construction experience in October was 3.6 percent, down from 4.5 percent in October 2017. The number of such workers fell to 352,000 from 418,000 a year earlier. Both figures were the lowest for October since the series began in 2000, the economist pointed out.

In the recent AGC-Autodesk Workforce survey, 76 percent of respondents said their firms plan to increase their headcount of hourly craft workers in the next year. However, 80 percent of the firms said they are having trouble filling hourly positions. For all but one of 20 specific crafts included in the survey, a majority of respondents reported that they were having more trouble hiring craft personnel this year compared to last year. Furthermore, over three-quarters of respondents replied that the local programs for supplying well-trained, skilled craft personnel were poor or only fair.

Association officials urged government leaders to adopt recommendations from the association’s Workforce Development Plan, including reforms to immigration policy and increased funding and flexibility for current federal career and technical education programs. They noted that more people would choose high-paying construction careers if they were exposed to them in school and elsewhere.

“Construction workers continue to benefit from positive economic conditions that are leading firms to boost pay and expand opportunities for their workforce,” Stephen E. Sandherr, the association’s chief executive officer, said. “We need more public officials to understand that the path to a good, middle-class life doesn’t always include attending a four-year college and spending a lifetime behind a desk.”