The construction industry added 34,000 jobs on net in August, according to an Associated Builders and Contractors analysis of data released by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment grew by 228,000 jobs, an increase of 2.8%.
Nonresidential construction employment increased by 28,300 positions on net, with growth in all three subcategories. Nonresidential specialty trade added the most jobs on net, increasing by 14,000 positions. Heavy and civil engineering and nonresidential building added 13,500 and 800 jobs, respectively.
The construction unemployment rate fell to 3.2% in August. Unemployment across all industries declined from 4.3% in July to 4.2% last month.
“August’s employment report is perfectly consistent with the notion of a soft landing,” said ABC Chief Economist Anirban Basu. “Unemployment fell both economywide and in the nation’s construction sector. Job growth in nonresidential construction was both brisk and broad-based. Moreover, Federal Reserve officials continue to indicate that they are ready to reduce interest rates, which is expected within the next two weeks.
“And yet, the level of concern has been rising among contractors,” said Basu. “According to both ABC’s Construction Confidence Index and Construction Backlog Indicator, the outlook among contractors is dimming gradually. Many projects have been postponed recently in the context of still-elevated borrowing costs and tighter lending conditions.
“Despite indications that interest rates are coming down, they may not fall as rapidly as many contractors hope,” said Basu. “The economy remains too strong to warrant rapid declines in interest rates implemented by the Federal Reserve. Moreover, average hourly earnings expanded more rapidly in August than anticipated, suggesting that inflation remains sticky and that Fed officials may only be able to reduce rates gingerly.”
