Employment climbs in July but unemployment rises; June openings, hires decline, spending is mixed
Friday, August 4, 2023
by: Ken Simonson, Chief Economist AGC of America

Section: AGC/VT News

Construction employment, seasonally adjusted, totaled 7,971,000 in July, a gain of 19,000 from June and 198,000 (2.5%) year-over-year (y/y), according to AGC’s analysis of data the Bureau of Labor Statistics (BLS) posted today. Residential construction employment (residential building and specialty contractors) rose by 7,800 in July and 58,400 (1.8%) y/y. Nonresidential construction employment (building, specialty trade, and heavy and civil engineering construction firms) rose by 10,600 for the month and 139,200 (3.1%) y/y. Seasonally adjusted average hourly earnings for production and nonsupervisory employees in construction (craft and office) rose 5.8% y/y to $34.24 per hour. The “premium” for hourly construction workers rose to 18.2% over the private sector average of $28.96, still considerably below the average premium in 2000-2019 of 21.5%. The number of unemployed jobseekers with construction experience rose from 359,000, not seasonally adjusted, in July 2022 (an unemployment rate of 3.5%) to 410,000 (3.9%).

There were 378,000 job openings in construction, not seasonally adjusted, at the end of June, a decrease of 92,000 (-2.1%) y/y from the all-time June high of 386,000 in 2022, BLS reported on Tuesday in its monthly Job Openings and Labor Turnover Survey (JOLTS) release. Hires for the full month totaled 406,000, a decrease of 21,000 (-4.9%) y/y.

Construction spending (not adjusted for inflation) totaled $1.94 trillion in June at a seasonally adjusted annual rate, up 0.5% from the upwardly revised May rate and up 3.5% y/y, the Census Bureau reported on Tuesday. 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 0.9%, with single-family homebuilding up 2.1%, multifamily construction spending up 1.5%, and owner-occupied improvements up 0.3%. Private nonresidential construction spending was virtually unchanged for the month. The largest private nonresidential segment (based on the seasonally adjusted June rate)—manufacturing construction—rose 0.3% (including computer/electronic/electrical, up 0.3%, and chemical and pharmaceutical, up 1.7%). Commercial construction inched up 0.1% (consisting of warehouse, unchanged; retail, down 1.5%; and farm, up 7.2%). Power declined 1.6% (with electric power down 1.7% and oil and gas field structures and pipelines down 1.1%). Private office and data center construction increased 0.9%. Public construction spending rose 0.3%. The largest public segment, highway and street construction, dipped 0.1%. Public education also slipped 0.1%. Public transportation construction climbed 0.3%.

The “value of commercial and multifamily construction starts across the top 10 metropolitan areas of the U.S. fell 10% in the first half of 2023, relative to that of 2022,” Dodge Construction Network reported on July 26. “Nationally, commercial and multifamily construction starts fell 14% on a year-to-date basis through June,” with multifamily down 18% and commercial down 11%. The New York metro area was the top market for commercial and multifamily starts at $10.8 billion, down 31% year-to-date. Second was the Dallas metro ($6.7 billion, down 17%), followed by Atlanta ($5.4 billion, up 18%), Miami ($4.7 billion, unchanged), Houston ($4.7 billion, up 29%), Los Angeles ($4.3 billion, up 2%), and Chicago ($4.2 billion, up 64%).

Construction employment, not seasonally adjusted, rose from June 2022 in 221 (62%) of the 358 metro areas (including divisions of larger metros) for which BLS posts construction employment data, fell in 69 (19%), and was unchanged in 68, 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 Dallas-Plano-Irving division added the most jobs (16,300 combined jobs or 10%), followed by New York City (10,200 combined jobs, 7%) and Portland-Vancouver-Hillsboro, Ore.-Wash. (8,600 construction jobs, 11%). The largest percentage gain was in Corvallis, Ore. (21%, 300 combined jobs), followed by Clarksville, Tenn.-Ky. (15%, 600 combined jobs) and Midland, Texas (15%, 5,500 combined jobs). The largest loss occurred in St. Louis, Mo.-Ill. (-4,400 combined jobs, -6%), followed by Miami-Miami Beach-Kendall, Fla. (-3,300 construction jobs, -6%) and the Los Angeles-Long Beach Glendale division (-3,000 construction jobs, -2%). Monroe, Mich. experienced the largest percentage job loss (-19%, -500 combined jobs), followed by Kankakee, Ill. (-13%, -1,400 combined jobs) and Bay City, Mich. (-12%, -200 combined jobs).

Contractors are invited to fill out the 2023 Autodesk/AGC Workforce Survey. Results will be posted in late August.