Construction employment lost 5,000 jobs on net in January, according to www.abc.org. Overall, the industry has recovered slightly more than 1 million—91%—of the jobs lost during earlier stages of the pandemic.
The construction unemployment rate rose from 5% in December 2021 to 7.1% in January. The national unemployment rate for all industries increased from 3.9% in December 2021 to 4% in January as the U.S. economy added 467,000 jobs.
Nonresidential construction lost 9,000 jobs in January; two of the three subcategories registered minimal gains for the month. Nonresidential building added 400 jobs and nonresidential specialty trade contractors added 100 jobs. Heavy and civil engineering lost 9,500 jobs.
“There are at least a dozen explanations for today’s employment report, which indicates that nonresidential construction employment declined in January even as many other segments added many jobs,” said Associated Builders and Contractors Chief Economist Anirban Basu. “First, it is conceivable that many construction workers left for other industries, including those who work in union settings, since pay increases are limited by pre-existing labor contracts. Second, it is possible that the omicron variant, which was peaking during the survey’s reference week, kept some workers off of payrolls. That explanation seems debatable, given rapid job growth economywide.
“Third, since much of the construction job loss was in infrastructure-oriented segments, it may be that some purchasers of public construction services have shifted into planning and engineering mode to figure out how incoming infrastructure dollars can and should be spent,” Basu continued. “Finally, it may also be the case that rapid cost increases during the pandemic have led more project owners, both public and private, to postpone projects.”
Basu said regardless of the explanation, the overall report has significant implications for contractors.
“Based on ABC’s Construction Confidence Index, contractors collectively expect that sales, employment and margins will grow over the next several months,” Basu said. “Today’s strong jobs report for the broader economy bodes well for more aggressive interest rate hikes, which will result in a higher cost of capital that is likely to dampen the demand for construction services.”
