Construction Unemployment Drops in January

February 7, 2014

The construction industry added 48,000 jobs in January, marking the industry’s largest jump in nearly seven years, according to analysis of federal data by the Associated General Contractors of America (AGC). The sector’s unemployment rate declined to 12.3 percent, bringing construction industry employment to the highest level since July 2009.

“Despite a second month of unusually severe weather in much of the nation, contractors more than offset the job losses that occurred in December,” said Ken Simonson, AGC’s chief economist. “All segments of the industry added workers for the month, and the sector has increased employment at nearly double the all-industry rate in the past 12 months.”

Construction employment totaled 5,922,000 in January, an increase of 48,000 from a month earlier and the largest one-month gain since April 2007, Simonson noted. For the year, construction employment rose by 179,000 or 3.1 percent, compared with an increase of 1.7 percent for total nonfarm payroll employment. Nonresidential construction firms added 31,300 new jobs in January and 57,100 (1.6 percent) over 12 months while residential firms added 16,800 jobs for the month and 121,400 (5.8 percent) over the year.

The unemployment rate for workers actively looking for jobs and last employed in construction declined from 16.1 percent in January 2013 to 12.3 percent last month—the lowest January rate since 2008. The number of unemployed construction workers decreased from 1,322,000 in January 2012 to 1,045,000 last month. That drop of 277,000 exceeded the growth of construction employment by nearly 100,000, implying that many experienced former construction workers have left the industry in the past year, Simonson pointed out. He said the result is in line with an AGC survey last month that found many contractors report difficulty finding skilled workers.

“Construction demand for workers is likely to accelerate in 2014 as more projects relating to oil and gas, manufacturing, warehouse and hotel construction break ground while demand for residential work—especially apartments—remains strong,” Simonson said. “It will be a challenge for contractors in many regions and specialties to find enough employees to perform the work ahead.”

AGC officials called on federal, state and local leaders to take steps to make it easier for school districts, firms and local construction associations to put in place training programs to prepare future construction workers. They added that they were finalizing a workforce development plan that identifies specific steps elected officials can take to improve the quality and quantity of career and technical training programs, especially at the secondary school level.

“Encouraging as it is to see firms adding job, there just aren’t that many construction workers in many parts of the country waiting to get called back to work,” said Stephen E. Sandherr, AGC's CEO. “Unless we act soon, many firms will be forced to delay projects as they scramble to find enough qualified workers to meet demand.”