Construction employment added 25,000 jobs on net in May, according to Associated Builders and Contractors. On a year-over-year basis, the industry has expanded by 192,000 jobs—an increase of 2.5%.
The construction unemployment rate fell from 4.1% in April to 3.5% in May. The national unemployment rate for all industries rose from 3.4% in April to 3.7% in May as the U.S. economy added 339,000 jobs.
Nonresidential construction added 22,100 jobs in May, with gains in all three subsectors. Heavy and civil engineering added 10,700 jobs for the month; nonresidential specialty trade contractors added 7,200 jobs; and nonresidential building added 4,200 jobs.
“Based on recent data, simply determining what is happening right now in the economy is difficult,” said ABC Chief Economist Anirban Basu. “While the establishment survey indicates that the nation added 339,000 jobs in May, smashing through consensus expectations, the household survey indicates that America lost 310,000 jobs for the month. Since economists generally place far more emphasis on the establishment survey, today’s data will generally be viewed as further indication of ongoing economic momentum.
“That momentum is especially apparent in the nation’s nonresidential construction segment,” Basu continued. “The construction industry unemployment rate is now below the economywide unemployment rate, and there are plenty of available, unfilled construction jobs. Among the principal takeaways is that there will continue to be substantial upward pressure on construction worker compensation during the months ahead.”
However, Basu said there are signs of weakness in the economy.
“Manufacturing appears to be in its own recession,” Basu said. “A number of state economies show evidence of commonplace definitions of recession. With credit conditions worsening, interest rates set to remain higher for longer, growing concerns regarding the health of commercial real estate and more consumers struggling to pay monthly bills in an inflationary environment, the onset of economywide recession later this year remains a possibility. Developer-driven construction activity is especially at risk of a sharp downturn at some point over the next year.”
