Construction employment declined by 7,000 between May and June as the industry still employs 238,000 fewer people than before the pandemic, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said that job losses in the nonresidential construction sector offset modest monthly gains in residential construction as many firms struggle with worker shortages, supply chain disruptions and rising materials prices.
“It is hard for the industry to expand when it can’t find qualified workers, key building materials are scarce, and the prices for them keep climbing,” said Stephen E. Sandherr, the association’s chief executive officer. “June’s job declines seem less about a lack of demand for projects and a lot more about a lack of supplies to use and workers to employ.”
Construction employment in June totaled 7,410,000, dropping 7,000 from the revised May total. The total in June remained 238,000 or 3.1% below February 2020, the high point before the pandemic drove construction employment down. The number of former construction workers who were unemployed in June, 730,000, dropped a quarter from a year ago and the sector’s unemployment rate fell from 10.1% in June 2020 to 7.5% this June.
Residential and nonresidential construction sectors have differed sharply in their recovery since the pre-pandemic peak in February 2020. Residential construction firms—contractors working on new housing, additions, and remodeling—gained 15,200 employees during the month and have added 51,000 workers or 1.7% over 16 months. The nonresidential sector—comprising nonresidential building, specialty trades, and heavy and civil engineering contractors—shed 22,600 jobs in June and employed 289,000 fewer workers or 6.2% less than in February 2020.
Sandherr noted that many firms report key materials are backlogged or rationed, while also reporting frequent increases in the amount they pay for those materials. In addition, many firms report they are having a hard time finding workers to hire despite the relatively high number of people currently out of work. He added these factors are contributing to rising costs for many contractors, which are details in the association’s updated Construction Inflation Alert.
Association officials said they were taking steps to recruit more people into the construction industry. They noted the association launched its “Construction is Essential” recruiting campaign earlier this year. They said Washington officials could help the industry by taking steps to ease supply chain backups. They also continued to call on the President to remove tariffs on key construction materials, including steel.
“The good news is there are large numbers of qualified workers available to hire who are on the sidelines until schools reopen and the federal unemployment supplements expire,” said Stephen E. Sandherr, the association’s chief executive officer. “Our message to these workers is clear, there are high-paying construction careers available when they are ready.”
Related Stories
Market Data | Jul 6, 2020
Construction industry adds 158,000 workers in June but infrastructure jobs decline
Gains in June are concentrated in homebuilding as state and local governments postpone or cancel roads and other projects in face of looming budget deficits.
Market Data | Jul 6, 2020
5 must reads for the AEC industry today: July 6, 2020
Demand growth for mass timber components and office demand has increased as workers return.
Market Data | Jul 2, 2020
Fall in US construction spending in May shows weakness of country’s construction industry, says GlobalData
Dariana Tani, Economist at GlobalData, a leading data and analytics company, offers her view on the situation
Market Data | Jul 2, 2020
6 must reads for the AEC industry today: July 2, 2020
Construction spending declines 2.1% in May and how physical spaces may adapt to a post-COVID world.
Market Data | Jul 1, 2020
Construction spending declines 2.1% in May as drop in private work outweighs public pickup
Federal infrastructure measure can help offset private-sector demand that is likely to remain below pre-coronavirus levels amid economic uncertainty.
Market Data | Jul 1, 2020
7 must reads for the AEC industry today: July 1, 2020
Facebook to build $800 million data center and 329 metro areas added construction jobs in May.
Market Data | Jun 30, 2020
AIA releases strategies and illustrations for reducing risk of COVID-19 in senior living communities
Resources were developed as part of AIA’s “Reopening America: Strategies for Safer Buildings” initiative.
Market Data | Jun 30, 2020
329 metro areas added construction jobs in May
Seattle-Bellevue-Everett, Wash. added the most construction jobs (28,600, 44%) in May.
Market Data | Jun 29, 2020
6 must reads for the AEC industry today: June 29, 2020
HQ tower features gardens on every floor and the head of Hilton talks about how his business will survive.
Market Data | Jun 26, 2020
5 must reads for the AEC industry today: June 26, 2020
Restoration of 1930s El Paso hotel completes and Arc offers tools, analytics for safe workplace re-entry.