The construction industry added 4,000 jobs in January, according to an Associated Builders and Contractors (ABC) analysis of data released by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment increased by 178,000 jobs, a 2.2 percent growth.
Nonresidential construction employment increased by 4,400 positions, with increases in two of the three subcategories. Nonresidential specialty trade added the most jobs, with 5,600 positions, followed by nonresidential building, which added 1,100 jobs. Heavy and civil engineering lost 2,300 jobs in January.
The construction unemployment rate rose to 6.5 percent in January. Unemployment across all industries decreased from 4.1 percent in December to 4 percent in January.
“Construction hiring has slowed to a crawl since October, with the industry averaging just 6,000 net new jobs per month,” says Anirban Basu, chief economist at ABC. “This is largely a reflection of weakness in the residential sector, which actually lost 200 jobs in January. Given the ongoing effects of high interest rates and the sharp decline in the number of housing units under construction, residential employment should continue to pull back over the next few quarters.
“Slowing demand for labor on the residential side of the industry could very well benefit nonresidential contractors,” Basu says. “Average hourly earnings for construction workers were up 4.1 percent on a year-over-year basis in January. While that’s still fast wage growth by historical standards, it’s also the smallest annual increase since 2021. With a majority of contractors expecting to expand their staffing levels over the first half of the year, according to ABC’s Construction Confidence Index, the availability of workers who would otherwise work on the residential side of the industry should help nonresidential wage growth return to healthier levels.”