The construction industry gained 22,000 jobs between August and September as nonresidential construction firms added employees for the first time in six months, 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 the widespread supply chain problems, which are causing owners already uncertain about future demand for commercial space to delay or even cancel some projects.
“While it is refreshing to see job gains in both residential and nonresidential construction, nonresidential building and infrastructure employment remains far below its pre-pandemic peak,” said Ken Simonson, the association’s chief economist. “It will take more than a few months of gains to match the overall economy.”
Construction employment in September totaled 7,447,000, an increase of 22,000 since August. However, industry employment remained 201,000 below the pre-pandemic peak set in February 2020.
The nonresidential segment, comprising nonresidential building and specialty trade contractors plus heavy and civil engineering construction firms, added 18,600 employees in September. But nonresidential employment is 281,000 below the February 2020 level, as the sector has recovered only 56 percent of the jobs lost in the first two months of the pandemic.
Residential construction--including building contractors such as homebuilders, along with residential specialty trades--added 3,600 employees in September. Residential employment tops the February 2020 mark by 80,000.
Simonson cited an unending series of supply-chain bottlenecks, as well as extreme price increases and long lead times for a variety of construction materials, as threats to further growth of nonresidential construction. He said he had heard about an increasing number of project owners deciding to postpone projects because of excessive cost increases and lead times. He noted that the association has again updated its Construction Inflation Alert, a guide to inform owners, officials, and others about the cost and supply-chain challenges.
Association officials urged the Biden administration to remove tariffs and import quotas on a range of key construction materials to help address supply chain disruptions. They added that Congress can help offset declining nonresidential demand for construction by passing the bipartisan infrastructure bill that has already cleared the Senate.
“Both parties in the House should make passing the infrastructure bill a top priority because it is the best way to create new construction careers and make our economy more efficient,” said Stephen E. Sandherr, the association’s chief executive officer. “If the President acts to address supply chain problems and Congress passes the infrastructure bill, construction employment is likely to surge.”
Related Stories
Industry Research | May 22, 2023
2023 High Growth Study shares tips for finding success in uncertain times
Lee Frederiksen, Managing Partner, Hinge, reveals key takeaways from the firm's recent High Growth study.
Multifamily Housing | May 8, 2023
The average multifamily rent was $1,709 in April 2023, up for the second straight month
Despite economic headwinds, the multifamily housing market continues to demonstrate resilience, according to a new Yardi Matrix report.
Market Data | May 2, 2023
Nonresidential construction spending up 0.7% in March 2023 versus previous month
National nonresidential construction spending increased by 0.7% in March, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau. On a seasonally adjusted annualized basis, nonresidential spending totaled $997.1 billion for the month.
Hotel Facilities | May 2, 2023
U.S. hotel construction up 9% in the first quarter of 2023, led by Marriott and Hilton
In the latest United States Construction Pipeline Trend Report from Lodging Econometrics (LE), analysts report that construction pipeline projects in the U.S. continue to increase, standing at 5,545 projects/658,207 rooms at the close of Q1 2023. Up 9% by both projects and rooms year-over-year (YOY); project totals at Q1 ‘23 are just 338 projects, or 5.7%, behind the all-time high of 5,883 projects recorded in Q2 2008.
Market Data | May 1, 2023
AEC firm proposal activity rebounds in the first quarter of 2023: PSMJ report
Proposal activity for architecture, engineering and construction (A/E/C) firms increased significantly in the 1st Quarter of 2023, according to PSMJ’s Quarterly Market Forecast (QMF) survey. The predictive measure of the industry’s health rebounded to a net plus/minus index (NPMI) of 32.8 in the first three months of the year.
Industry Research | Apr 25, 2023
The commercial real estate sector shouldn’t panic (yet) about recent bank failures
A new Cushman & Wakefield report depicts a “well capitalized” banking industry that is responding assertively to isolated weaknesses, but is also tightening its lending.
Architects | Apr 21, 2023
Architecture billings improve slightly in March
Architecture firms reported a modest increase in March billings. This positive news was tempered by a slight decrease in new design contracts according to a new report released today from The American Institute of Architects (AIA). March was the first time since last September in which billings improved.
Contractors | Apr 19, 2023
Rising labor, material prices cost subcontractors $97 billion in unplanned expenses
Subcontractors continue to bear the brunt of rising input costs for materials and labor, according to a survey of nearly 900 commercial construction professionals.
Data Centers | Apr 14, 2023
JLL's data center outlook: Cloud computing, AI driving exponential growth for data center industry
According to JLL’s new Global Data Center Outlook, the mass adoption of cloud computing and artificial intelligence (AI) is driving exponential growth for the data center industry, with hyperscale and edge computing leading investor demand.
Healthcare Facilities | Apr 13, 2023
Healthcare construction costs for 2023
Data from Gordian breaks down the average cost per square foot for a three-story hospital across 10 U.S. cities.