The construction industry added 11,000 jobs between June and July but nonresidential construction employment remains far below pre-pandemic levels, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said nonresidential construction has been affected by declining demand for projects, particularly for public infrastructure work, and urged Congress to quickly pass the new bipartisan infrastructure measure.
“Contractors are plagued by soaring materials costs, long or uncertain delivery times, and hesitancy by project owners to commit to construction,” said Ken Simonson, the association’s chief economist. “Recovery has been especially slow in infrastructure construction.”
Construction employment in July totaled 7,421,000, a gain of 11,000 from June, following three months of job losses. However, the rebound was limited to residential and specialty trade contractors, while nonresidential building and infrastructure construction firms continued to shed workers.
Residential building contractors such as homebuilders added 8,300 employees in July, while employment was unchanged among residential specialty trade contractors. The two residential segments have added a total of 58,500 employees, or 2.0%, to their workforce since February 2020.
In contrast, nonresidential building contractors shed 2,500 employees in July. Employment declined by 2,100 among heavy and civil engineering construction firms—the segment most involved with infrastructure. Nonresidential specialty trade contractors added 7,500 employees in the month. Following the huge loss of jobs between February and April 2020 at the beginning of the pandemic, infrastructure contractors have added back only 37% of lost jobs. Nonresidential building and specialty trade contractors have each regained about 60% of lost workers, while the total nonfarm payroll economy has recouped 75% of workers.
Simonson observed that an unprecedented number of materials are experiencing extreme price increases and long lead times for production or delivery to project sites. These problems mean fewer construction workers are being employed and some owners are delaying project starts, adding to the drag on industry employment. The economist noted that the association has just updated its Construction Inflation Alert, a guide to inform owners, officials, and others about the cost and supply-chain challenges.
Association officials noted the new infrastructure measure boosts federal investments in a wide range of infrastructure projects, which will help generate new demand in the nonresidential sector. They added the bill appears likely to pass in the Senate but that some members of the House want to delay action on the bipartisan measure until passing an unrelated, partisan, spending bill.
“The last thing Washington should be doing is holding up a much-needed, bipartisan infrastructure bill while commercial contractors struggle to add jobs,” said Stephen E. Sandherr, the association’s chief executive officer.
Related Stories
Market Data | Aug 3, 2020
Construction spending decreases for fourth consecutive month in June
Association officials warn further contraction is likely unless federal government enacts prompt, major investment in infrastructure as state and local governments face deficits.
Market Data | Aug 3, 2020
6 must reads for the AEC industry today: August 3, 2020
The future is a number game for retail and restaurants and 5 reasons universities are renovating student housing.
Market Data | Jul 31, 2020
5 must reads for the AEC industry today: July 31, 2020
Vegas's newest resort and casino is packed with contactless technology and Mariott, Hilton, and IHG dominate the U.S. hotel construction pipeline.
Market Data | Jul 30, 2020
Marriott, Hilton, and IHG continue to dominate the U.S. hotel construction pipeline at Q2’20 close
Hilton’s Home2 Suites and IHG’s Holiday Inn Express continue to be the most prominent brands in the U.S. pipeline.
Market Data | Jul 30, 2020
7 must reads for the AEC industry today: July 30, 2020
Millennium Tower finally has a fix and construction costs decrease for the first time in 10 years.
Market Data | Jul 29, 2020
62% of metros shed construction jobs from June 2019 to June 2020 as Association calls for new infrastructure funding, other relief steps
New York City and Brockton-Bridgewater-Easton, Mass. have worst 12-month losses, while Austin and Walla Walla, Wash. top job gainers.
Market Data | Jul 29, 2020
6 must reads for the AEC industry today: July 29, 2020
The world's first net-zero airport and California utility adopts climate emergency declaration.
Market Data | Jul 28, 2020
For the fourth consecutive quarter, Los Angeles leads the U.S. hotel construction pipeline at the close of Q2’ 20
New York City continues to have the greatest number of projects under construction, with 106 projects/18,354 rooms.
Market Data | Jul 28, 2020
6 must reads for the AEC industry today: July 28, 2020
St. Petersburg Pier reconstruction completes and post-pandemic workplace design will not be the same for all.
Market Data | Jul 28, 2020
Senate Republicans' coronavirus relief measure includes provisions that will help hard-hit construction firms recover
The HEALS Act includes essential liability, workforce, financial & unemployment reforms, but association will work to get needed infrastructure investments included in final relief measure.