Construction Employment Flat in August

September 6, 2013

Construction employment stalled in August, while in the industry unemployment rate dropped, according to an analysis of federal data by the Associated General Contractors of America (AGC).

“After a strong rebound in 2012, construction hiring and spending have been stuck in neutral through most of 2013,” said Ken Simonson, AGC’s chief economist. “Yet the unemployment rate for former construction workers hit the lowest August level in five years, suggesting that experienced workers are leaving the industry rather than returning to it. As a result, firms are already having trouble finding workers.”

Construction employment totaled 5,798,000 in August, matching the July total, which was revised up by 5,000 from the initial estimate released four weeks ago. The August total is 3 percent higher than in August 2012 but has been nearly flat since March 2013. Meanwhile, the unemployment rate for workers actively looking for jobs and last employed in construction declined from 11.3 percent in August 2012 to 9.1 percent last month—the lowest August rate since 2008.

“Over the past three years, the number of unemployed, experienced construction workers has dropped by half,” Simonson said. “Unfortunately, the construction industry has been able to hire only about a third of those workers, while the rest have left construction for other industries, schooling, retirement or have dropped out of the labor force. The recent leveling-off of construction hiring means the industry risks losing more of its experienced workers, setting up a potentially grave shortfall when demand for construction resumes."

Results of an AGC survey indicated a majority (74 percent) of construction employers are having difficulties filling positions for skilled workers. More than half (53 percent) of respondents are having problems filling professional positions.

“Construction employment has leveled off for now, but retirements and selected areas of demand mean there is still a need to address worker shortages before they become acute,” said Stephen E. Sandherr, AGC’s CEO. “We need to make sure there is an adequate supply of skilled construction labor to meet future demand.”

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