Construction Remains One of Economy’s Bright Spots

by Jonathan McGaha | 31 March 2016 12:00 am

The U.S. construction industry added 37,000 net new jobs in March according to an analysis of today’s U.S. Bureau of Labor Statistics[1] release by Associated Builders and Contractors[2] (ABC). On a year-over-year basis, construction employment expanded by 301,000 net new jobs, the industry’s largest annual increase since May 2015. The industry added 20,000 net new jobs in February (revised upward from 19,000) and 18,000 net new jobs in January.

The nonresidential sector added 12,700 jobs on a monthly basis in March after adding only 1,300 net new positions in February (revised downward from 2,800). Nonresidential specialty trade contractors added 6,500 positions in March after losing jobs in the first two months of the year. Heavy and civil engineering employment added 11,200 net new jobs in March, the sector’s largest gain since January 2014, perhaps partially because recently passed federal highway legislation signals more work in the pipeline.

“The headline job growth number tells us that construction remains one of the U.S. economy’s leading economic drivers,” said ABC’s Chief Economist Anirban Basu. “While the broader economic recovery remains in place, construction accounts a disproportionate share of that recovery. Many other aspects of the recovery remain at least somewhat unsatisfying, including surprisingly soft wage growth, weak corporate profits and sluggishness in business investment. However, demand for labor remains high, including in a number of key nonresidential construction segments.

“Continued job growth helps fuel both spending power and confidence,” said Basu. “Naturally, consumer spending-led recoveries such as this more directly impact residential construction segments than nonresidential. Accordingly, the residential construction recovery continues to be a bit more forceful and that is likely to continue during the months ahead.”

The construction industry unemployment rate remained unchanged at 8.7 percent in March, but remains almost a full percentage point lower than at the same time one year ago. The unemployment rate across all industries rose by a tenth of a percentage point in March and now stands at 5 percent. This slight uptick is largely attributable to the 396,000 people who entered the labor force in March, a positive indication for the durability of the expansion.

• Nonresidential building construction employment expanded by 6,200 jobs in March and is up by 20,800 jobs or 2.9 percent on a year-over-year basis.
• Residential building construction employment expanded by 1,800 jobs in March and is up by 30,800 jobs or 4.5 percent on a year-ago basis.
• Nonresidential specialty trade contractors added 6,500 jobs for the month and employment in that category is up by 86,500 jobs or 3.8 percent from the same time one year ago.
• Residential specialty trade contractors added 11,600 net new jobs in March and have added 135,200 jobs or 7.7 percent since March 2015.
• The heavy and civil engineering construction segment gained 11,200 jobs in March and is up by 27,500 positions or 3 percent on a year-over-year basis

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