Currently Reading

Construction employment stalls in April

Market Data

Construction employment stalls in April

Soaring costs, supply-chain challenges, and workforce shortages undermine industry's recovery.


By AGC | May 7, 2021

Courtesy Pixabay

Construction employment was unchanged from March to April as nonresidential contractors and homebuilders alike struggled to obtain materials and find enough workers, according to an analysis by the Associated General Contractors of America of government data released today. Association officials said the industry’s recovery was being hampered by problems getting stable prices and reliable deliveries of key materials, while the pandemic and federal policies were making it harder for firms to find workers to hire.

“Contractors are experiencing unprecedented intensity and range of cost increases, supply-chain disruptions, and worker shortages that have kept firms from increasing their workforces,” said Ken Simonson, the association’s chief economist. “These challenges will make it difficult for contractors to rebound as the pandemic appears to wane.”

Construction employment in April totaled 7,452,000, matching the March total but amounting to 196,000 employees or 2.6% below the most recent peak in February 2020. The number of former construction workers who were unemployed in April, 768,000, dropped by half from a year ago and the sector’s unemployment rate fell from 16.6% in April 2020 to 7.7% last month.

“The fact that employment has stalled—despite strong demand for new homes, remodeling of all types, and selected categories of nonresidential projects—suggests that contractors can’t get either the materials or the workers they need,” Simonson added. The economist noted that many firms report key materials are backlogged or rationed, while others report they are having a hard time getting former workers to return to work. He added these factors are contributing to rising costs for many contractors, which are details in the association’s updated Construction Inflation Alert.

Although employment was nearly stagnant for the month for both residential and nonresidential construction, the sectors differ sharply in their recovery since the pre-pandemic peak in February 2020. Residential construction firms—contractors working on new housing, additions, and remodeling—gained only 3,000 employees during the month but have added 46,000 workers or 1.6% over 14 months. The nonresidential sector—comprising nonresidential building, specialty trades, and heavy and civil engineering contractors—shed 3,000 jobs in April and employed 242,000 fewer workers or 5.2% less than in February 2020.

Association officials said that the temporary new federal unemployment supplements appear to be keeping some people from returning to work, while others are being forced to care for dependents not yet back in school or day care, or loved ones afflicted with the coronavirus. They added that federal tariffs and labor shortages within the shipping and manufacturing sector are a major reason for the rising materials prices and supply chain problems.

“Ironically, the latest coronavirus relief bill may actually be holding back economic growth by keeping people away from work at a time when demand is rebounding,” said Stephen E. Sandherr, the association’s chief executive officer. “Federal officials need to look at ways to encourage people to return to work, end damaging tariffs on materials like steel and lumber, and act to ease shipping delays and backlogs.”

Related Stories

Market Data | Sep 15, 2021

ABC’s Construction Backlog Indicator plummets in August; Contractor Confidence down

ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels all fell modestly in August.

Market Data | Sep 7, 2021

Construction sheds 3,000 jobs in August

Gains are limited to homebuilding as other contractors struggle to fill both craft and salaried positions.

Market Data | Sep 3, 2021

Construction workforce shortages reach pre-pandemic levels

Coronavirus continues to impact projects and disrupt supply chains.

Multifamily Housing | Sep 1, 2021

Top 10 outdoor amenities at multifamily housing developments for 2021

Fire pits, lounge areas, and covered parking are the most common outdoor amenities at multifamily housing developments, according to new research from Multifamily Design+Construction.

Market Data | Sep 1, 2021

Construction spending posts small increase in July

Coronavirus, soaring costs, and supply disruptions threaten to erase further gains.

Market Data | Sep 1, 2021

Bradley Corp. survey finds office workers taking coronavirus precautions

Due to the rise in new strains of the virus, 70% of office workers have implemented a more rigorous handwashing regimen versus 59% of the general population.

Market Data | Aug 31, 2021

Three out of four metro areas add construction jobs from July 2020 to July 2021

COVID, rising costs, and supply chain woes may stall gains.

Market Data | Aug 24, 2021

July construction employment lags pre-pandemic peak in 36 states

Delta variant of coronavirus threatens to hold down further gains.

Market Data | Aug 17, 2021

Demand for design activity continues to expand

The ABI score for July was 54.6.

Market Data | Aug 12, 2021

Steep rise in producer prices for construction materials and services continues in July.

The producer price index for new nonresidential construction rose 4.4% over the past 12 months.

More In Category





Magazine Subscription
Subscribe

Get our Newsletters

Each day, our editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Subscribe

Follow BD+C: