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 | Jul 21, 2022
Architecture Billings Index continues to stabilize but remains healthy
Architecture firms reported increasing demand for design services in June, according to a new report today from The American Institute of Architects (AIA).
Market Data | Jul 21, 2022
Despite deteriorating economic conditions, nonresidential construction spending projected to increase through 2023
Construction spending on buildings is projected to increase just over nine percent this year and another six percent in 2023, according to a new report from the American Institute of Architects (AIA).
Building Team | Jul 18, 2022
Understanding the growing design-build market
FMI’s new analysis of the design-build market forecast for the next fives years shows that this delivery method will continue to grow, despite challenges from the COVID-19 pandemic.
Market Data | Jul 1, 2022
Nonresidential construction spending slightly dips in May, says ABC
National nonresidential construction spending was down by 0.6% in May, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.
Market Data | Jun 30, 2022
Yardi Matrix releases new national rent growth forecast
Rents in most American cities continue to rise slightly each month, but are not duplicating the rapid escalation rates exhibited in 2021.
Market Data | Jun 22, 2022
Architecture Billings Index slows but remains strong
Architecture firms reported increasing demand for design services in May, according to a new report today from The American Institute of Architects (AIA).
Building Team | Jun 17, 2022
Data analytics in design and construction: from confusion to clarity and the data-driven future
Data helps virtual design and construction (VDC) teams predict project risks and navigate change, which is especially vital in today’s fluctuating construction environment.
Market Data | Jun 15, 2022
ABC’s construction backlog rises in May; contractor confidence falters
Associated Builders and Contractors reports today that its Construction Backlog Indicator increased to nine months in May from 8.8 months in April, according to an ABC member survey conducted May 17 to June 3. The reading is up one month from May 2021.
Market Data | May 18, 2022
Architecture Billings Index moderates slightly, remains strong
For the fifteenth consecutive month architecture firms reported increasing demand for design services in April, according to a new report today from The American Institute of Architects (AIA).
Market Data | May 12, 2022
Monthly construction input prices increase in April
Construction input prices increased 0.8% in April compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
