Nonresidential Construction Employment Rises Slightly in September, Says ABC

WASHINGTON (Oct. 8, 2021) — The construction industry added 22,000 jobs on net in September, according to an Associated Builders and Contractors (ABC) analysis of data by the U.S. Bureau of Labor Statistics. Overall, the industry has recovered 912,000 (81.9%) of the jobs lost during earlier stages of the pandemic.

Nonresidential construction employment increased by 18,600 positions on net, with all three subcategories showing gains for the month. Nonresidential specialty trade contractors added 11,400 jobs, while nonresidential building and heavy and civil engineering employment rose by 4,100 and 3,100 positions, respectively.

The construction unemployment rate dropped slightly to 4.5% in September. Unemployment across all industries fell from 5.2% in August to 4.8% last month.

“The economy added fewer than 200,000 jobs in September, well below the consensus forecast of 500,000 new jobs, making it clear that August’s disappointing employment performance was not an aberration,” said ABC Chief Economist Anirban Basu. “Earlier during the summer, the U.S. economy had been adding jobs at a rapid pace. The last few weeks suggest the final stages of labor market recovery will prove extremely challenging.

“Theories abound regarding why employers are struggling to fill available jobs, including fear of infection and vaccination, previously received federal assistance and changed values during the pandemic,” said Basu. “Recent data suggest that many job seekers are actively looking for opportunities to continue to work from home much of the time. Construction generally does not supply many opportunities for telework.

“The ongoing labor shortage puts continued upward pressure on the price of delivering construction services,” said Basu. “Along with input shortages and rising materials prices, this is placing the recovery of nonresidential construction spending at risk. Based on ABC’s Construction Backlog Indicator, a growing chorus of project owners are choosing to delay projects and, in some instances, cancel them altogether. The primary issue is that bids are coming in too high to justify the deployment of capital under many circumstances.

“Despite adding jobs on net in September, construction industry employment remains below March 2021 levels, and recent economic data suggest that some fraction of the confidence contractors have been expressing in recent months is unjustified,” said Basu. “Inflationary pressures are slowing the pace of recovery in nonresidential construction, and with global supply chains in disarray and employers suffering ongoing difficulty filling openings, industry challenges will persist into 2022. At some point, however, the labor market should begin to normalize as people experience growing difficulty paying their bills and global supply chain dynamics eventually improve.” Visit abc.org.