Construction employment rate rises, but lags ahead of pandemic

Dive brief:

  • Construction employment in June in 39 states remained below the pre-pandemic peak of February 2020, according to an analysis of federal government data by the Associated General Contractors of America.
  • Although not back to pre-pandemic levels, construction employment has improved over the past year, according to a report by Associated Builders and Contractors.
  • The AGC and ABC note supply chain constraints and rising material prices are undermining demand for new projects and hampering companies’ plans to hire new workers.

Dive overview:

Although national construction employment increased by 233,000 from June 2020, seasonally adjusted construction employment remained below its February 2020 high of 238,000, or 3.1%, according to the ABC report. Construction employment is unlikely to increase in many parts of the country until the supply chain challenges facing the industry improve, according to the AGC Report.

A number of homeowners are postponing projects because rising costs and delivery delays have made the projects unfeasible or they want to wait until conditions improve, said Ken Simonson, chief economist at AGC.

“We are seeing some recovery, not where we were, but we are moving forward,” said Bernie Markstein, president and chief economist of Markstein Advisors, an economic consultancy firm. “A big question is, will there be a Washington infrastructure bill? If we get that, it will obviously help construction. I’m pretty optimistic overall in terms of construction going forward.”

The Senate voted on Wednesday advance an invoice which includes $ 550 billion in new federal infrastructure funding. AGC officials said President Joe Biden could help the industry further by “removing tariffs on major building materials,” the report said, and “ending unemployment supplements.” This would increase the pool of workers available for hire.

“First of all, there was a long-term problem of having enough skilled workers in particular [and] the pandemic has only exacerbated this problem, ”said Markstein. “The pace at which people are retiring and the skills gap that exists is pretty big. This is going to continue to be a problem for the industry for at least a few years and maybe up to five years or more. “

The national unemployment rate in construction fell from 5.5% in February 2020 to 7.5% in June 2021, according to the ABC report.

From May to June, construction employment declined in 25 states, increased in 24 states and Washington, DC, and remained the same in Maine, according to the AGC report. The largest decline during the month occurred in New York City, which lost 6,900 construction jobs, or 1.9%, followed by Pennsylvania, which lost 4,100 jobs, or 1.6%. The largest percentage drop since May occurred in Vermont, which lost 3.5%. New York, Alabama and North Dakota each lost 1.9% of previous construction jobs, according to the AGC report.

Georgia added the most construction jobs over the same period, adding about 5,700 jobs, an increase of 2.9%. Kentucky and Florida followed, adding 2,700 jobs, or 3.4%, and 2,500 jobs, or 0.4%, respectively. Kentucky recorded the largest percentage gain for the May-June period, followed by Alaska and Georgia, both of which rose 3.0%.