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 | Feb 14, 2023
The average U.S. contractor has nine months worth of construction work in the pipeline
Associated Builders and Contractors reports today that its Construction Backlog Indicator declined 0.2 months to 9.0 in January, according to an ABC member survey conducted Jan. 20 to Feb. 3. The reading is 1.0 month higher than in January 2022.
Office Buildings | Feb 9, 2023
Post-Covid Manhattan office market rebound gaining momentum
Office workers in Manhattan continue to return to their workplaces in sufficient numbers for many of their employers to maintain or expand their footprint in the city, according to a survey of more than 140 major Manhattan office employers conducted in January by The Partnership for New York City.
Giants 400 | Feb 9, 2023
New Giants 400 download: Get the complete at-a-glance 2022 Giants 400 rankings in Excel
See how your architecture, engineering, or construction firm stacks up against the nation's AEC Giants. For more than 45 years, the editors of Building Design+Construction have surveyed the largest AEC firms in the U.S./Canada to create the annual Giants 400 report. This year, a record 519 firms participated in the Giants 400 report. The final report includes 137 rankings across 25 building sectors and specialty categories.
Multifamily Housing | Feb 7, 2023
Multifamily housing rents flat in January, developers remain optimistic
Multifamily rents were flat in January 2023 as a strong jobs report indicated that fears of a significant economic recession may be overblown. U.S. asking rents averaged $1,701, unchanged from the prior month, according to the latest Yardi Matrix National Multifamily Report.
Market Data | Feb 6, 2023
Nonresidential construction spending dips 0.5% in December 2022
National nonresidential construction spending decreased by 0.5% in December, 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 $943.5 billion for the month.
Architects | Jan 23, 2023
PSMJ report: The fed’s wrecking ball is hitting the private construction sector
Inflation may be starting to show some signs of cooling, but the Fed isn’t backing down anytime soon and the impact is becoming more noticeable in the architecture, engineering, and construction (A/E/C) space. The overall A/E/C outlook continues a downward trend and this is driven largely by the freefall happening in key private-sector markets.
Hotel Facilities | Jan 23, 2023
U.S. hotel construction pipeline up 14% to close out 2022
At the end of 2022’s fourth quarter, the U.S. construction pipeline was up 14% by projects and 12% by rooms year-over-year, according to Lodging Econometrics.
Products and Materials | Jan 18, 2023
Is inflation easing? Construction input prices drop 2.7% in December 2022
Softwood lumber and steel mill products saw the biggest decline among building construction materials, according to the latest U.S. Bureau of Labor Statistics’ Producer Price Index.
Market Data | Jan 10, 2023
Construction backlogs at highest level since Q2 2019, says ABC
Associated Builders and Contractors reports today that its Construction Backlog Indicator remained unchanged at 9.2 months in December 2022, according to an ABC member survey conducted Dec. 20, 2022, to Jan. 5, 2023. The reading is one month higher than in December 2021.
Market Data | Jan 6, 2023
Nonresidential construction spending rises in November 2022
Spending on nonresidential construction work in the U.S. was up 0.9% in November versus the previous month, and 11.8% versus the previous year, according to the U.S. Census Bureau.