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
Contractors | Sep 19, 2017
Commercial Construction Index finds high optimism in U.S. commercial construction industry
Hurricane recovery efforts expected to heighten concerns about labor scarcities in the south, where two-thirds of contractors already face worker shortages.
Multifamily Housing | Sep 15, 2017
Hurricane Harvey damaged fewer apartments in greater Houston than estimated
As of Sept. 14, 166 properties reported damage to 8,956 units, about 1.4% of the total supply of apartments, according to ApartmentData.com.
Hotel Facilities | Sep 6, 2017
Marriott has the largest construction pipeline of any franchise company in the U.S.
Marriott has the most rooms currently under construction with 482 Projects/67,434 Rooms.
Market Data | Sep 5, 2017
Nonresidential construction declines again, public and private sector down in July
Weakness in spending was widespread.
Market Data | Aug 29, 2017
Hidden opportunities emerge from construction industry challenges
JLL’s latest construction report shows stability ahead with tech and innovation leading the way.
Market Data | Aug 28, 2017
U.S. hotel construction pipeline is up 7% year-over-year
For the economy, the rate of growth may be low but it’s running on all cylinders.
Market Data | Aug 23, 2017
Architecture Billings Index growth moderates
“The July figures show the continuation of healthy trends in the construction sector of our economy,” said AIA Chief Economist, Kermit Baker.
Architects | Aug 21, 2017
AIA: Architectural salaries exceed gains in the broader economy
AIA’s latest compensation report finds average compensation for staff positions up 2.8% from early 2015.
Market Data | Aug 20, 2017
Some suburban office markets are holding their own against corporate exodus to cities
An analysis of mortgage-backed loans suggests that demand remains relatively steady.
Market Data | Aug 17, 2017
Marcum Commercial Construction Index reports second quarter spending increase in commercial and office construction
Spending in all 12 of the remaining nonresidential construction subsectors retreated on both an annualized and monthly basis.