Construction employment lost 3,000 jobs on net in August, according to www.abc.org. The industry has added 881,000 jobs since August 2020, recovering 79.6% of the jobs lost since the start of the COVID-19 pandemic.
The construction unemployment rate fell from 6.1% in July to 4.6% in August. The national unemployment rate for all industries decreased from 5.4% in July to 5.2% in August as the U.S. economy added 235,000 jobs.
Nonresidential construction lost 20,300 jobs in August, with all three subcategories registering losses for the month. Nonresidential specialty trade contractors lost 9,200 jobs; heavy and civil engineering lost 8,300 jobs; and nonresidential building lost 2,800 jobs.
Associated Builders and Contractors Chief Economist Anirban Basu said although the Delta variant of COVID-19 has influenced the unemployment report, construction employment was more affected by supply chain issues.
“Collectively, nonresidential contractors exhibited significant confidence in the past few months,” Basu said. “In general, positive expectations have gone unmet, at least thus far. Industry participants had anticipated rising employment during the back half of 2021, according to ABC’s Construction Confidence Index, but nonresidential employment declined by more than 20,000 positions in August. Anecdotal evidence suggests that many projects have been put on hold. This is due to lofty construction costs, which is the result of global supply chains in disarray and growing difficulty hiring skilled construction workers.
“What is truly unnerving is that despite the loss of industry jobs in August, the construction unemployment rate actually declined from 6.1% in July to 4.6% last month,” Basu continued. “The implication is that the construction workforce is not expanding. This opens up the possibility that labor costs could continue to rise rapidly even if industry momentum softens further. Furthermore, with the Delta variant causing additional supply chain disruptions in Asia and elsewhere, materials prices may not decline as rapidly as had been hoped. This potentially sets the stage for waning industry momentum as 2022 approaches. The good news is that today’s weak employment numbers will likely help keep interest rates lower for a lengthier period.”
