Construction employment decreased by 61,000 jobs in February, according to www.abc.org. During the past nine months, the industry has added 805,000 jobs, recovering 72.3% of the industrywide jobs lost since the start of the COVID-19 pandemic.
The construction unemployment rate rose from 9.4% in January to 9.6% in February—an increase of 4.1 percentage points compared with the same time last year. The national unemployment rate for all industries fell from 6.3% in January to 6.2% in February as the U.S. economy added 379,000 jobs.
Almost all the job loss was in nonresidential construction, which lost 60,800 jobs on net in February, and there were job losses in all three nonresidential segments. Nonresidential specialty trade contractors lost 36,700 jobs on net; heavy and civil engineering lost 20,800 jobs on net; and nonresidential building lost 3,300 jobs on net.
Much of the February data was affected by severe weather in the South.
“Today’s employment report should not cause alarm among stakeholders in the nonresidential construction industry,” said Associated Builders and Contractors Chief Economist Anirban Basu. “In recent months, contractors have become more upbeat regarding industry prospects, as indicated by ABC’s Construction Backlog Indicator, citing rising backlog and expectations for rising employment, sales and even profit margins. While the loss of employment is never pleasant, February data were impacted by weather-related interruptions in the South, which likely resulted in some temporary job loss, but tells us little about fundamental industry dynamics.
“The balance of the economy appears to be outperforming expectations in terms of labor market recovery, and there is now growing evidence that more pervasive vaccinations are beginning to shape economic outcomes for the better,” Basu continued. “Stimulus passed by the previous presidential administration has helped to further bulk up consumer spending, and there is more stimulus on the way. All of this is consistent with ABC’s long-standing forecast that the second half of 2021 will be spectacular for economic growth.”
Basu said potential challenges for contractors could be rising interest rates and inflation, as well as a sharp increase in borrowing costs.