Construction Employment Gains in March

Overall construction employment climbed by 19,000 jobs between February and March, according to an analysis by the Associated General Contractors of America of government data.

“Construction is contributing significantly to the expansion of employment and the overall economy,” said Ken Simonson, the association’s chief economist, in a prepared statement. “But the sector is facing growing challenges in terms of filling job openings, obtaining materials, and keeping up with soaring wages and prices.”

Industry employment totaled 7,628,000 in March, topping the pre-pandemic peak set in February 2020 for the first time. Residential building and specialty trade contractors added 7,600 employees in March, and the sector’s employment exceeded the February 2020 level by 161,000 or 5.4 percent.

Employment increased by 11,300 for the month among nonresidential firms—building, specialty trade, and heavy and civil engineering construction contractors—but remained 157,000 or 3.4 percent shy of the February 2020 mark, according to AGC.

The Associated Builders and Contractors analysis noted that heavy and civil engineering added 5,000 net new jobs; nonresidential specialty trade contractors added 3,700 positions; and nonresidential building added 2,600 jobs.

“Contractors continue to signal that they are searching far and wide for additional workers,” said Anirban Basu, ABC chief economist, in a statement. “With more workers reentering the labor market, job openings continue to translate into employment growth. Given elevated backlog and the expectation that demand for services will remain high...construction employment is poised to grow further this year.

“Interestingly, the unemployment rate for construction workers is well above the economywide rate,” said Basu. “This is at odds with the notion of a severe worker shortage facing construction. The issue relates to skill sets. While many refer to the current circumstances as a labor or worker shortage, it is perhaps more properly characterized as a skills shortage.

“With infrastructure spending set to rise and construction workers retiring at a rapid rate, skills shortages are likely to worsen going forward,” said Basu. “That translates into rapid wage growth. Given high and rising materials prices, project owners will continue to see elevated bids for construction service delivery, although how this will affect project postponements and cancellations remains unclear.” 

Despite the recent employment increases, construction job openings at the end of February totaled 364,000, the largest February total, by far, in the 22-year history of that series, Simonson said. Openings exceeded the 342,000 workers hired in February, implying that contractors wanted to hire more than twice as many workers as they were able to, he added.