Construction Job Growth Rebounds in 2017
National construction employment started 2017 on a high note,
adding 36,000 net new jobs on a seasonally adjusted basis in
January, according to analysis of U.S. Bureau of Labor Statistics data released
today by the Associated Builders and Contractors (ABC). The
0.5 percent increase represents the best month for construction
employment growth since March of 2016.
The nonresidential construction
sector added 14,900 net new jobs for the month, while its
residential counterpart added 20,300 net new jobs (note that these
don't sum to the total due to rounding). The construction industry
added 170,000 net new jobs on a yearly basis, an increase of 2.6
"Today's employment report indicated
growing strength in construction along a variety of dimensions,"
said ABC chief economist Anirban Basu. "First of all, there was job
growth in both residential and nonresidential categories. Over the
past year, nonresidential construction has accounted for roughly a
quarter of total construction job creation. However, in January,
nonresidential activities accounted for more than 40 percent of net
new jobs, indicating relatively faster performance improvement in
that part of the nation's construction sector. Secondly, the
industry's unemployment rate surged in January to 9.4 percent.
While one would be tempted to suggest that this was due to a loss
of seasonal construction employment, that cannot be a primary
explanation since the total number of construction jobs expanded
meaningfully in January. The better explanation is that more people
have begun to look for work in the construction industry, perhaps
in part because of indications from the new administration in
Washington D.C. that an infrastructure-led stimulus package is now
in the works.
"The rapid pace of hiring is
consistent with ABC's backlog survey, which indicates that the
typical nonresidential construction firm can look forward to many
more months of activity," said Basu. "With continued aggressive
investment in commercial properties and still-low interest rates,
backlog will continue to expand among many contractors. Indeed, the
architecture billing index, a key industry leading indicator,
surged late last year in part because of growing confidence in the
"For contractors, this is likely to
mean even more difficulty in finding suitable workers to complete
projects," said Basu. "While the industry unemployment rate has
been rising, there is no assurance that new entrants into the U.S.
labor force possess the skills necessary to work on today's
construction projects. This also likely implicates faster wage
growth within the nation's construction workforce."
The construction unemployment rate
increased by 2 percentage points in January and now stands at 9.4
percent. That is an increase of 4.9 percentage points since July
2016. The nationwide unemployment rate, which inched up to 4.8
percent in January, has decreased by a tenth of a percentage point
over that same time period.