Construction Employment and Pay Rise in 2018; Unemployment at 5.1 Percent

Construction employment increased by 38,000 jobs in December and by 280,000 jobs, or 4.0 percent, over the past year, while the industry’s average pay accelerated and unemployment decreased to a historic low, according to an analysis of new government data by the Associated General Contractors of America. Association officials added that most contractors report they plan to continue hiring in 2019, according to the association’s annual outlook that was released earlier this week. 

“Demand for construction remains strong across most project types and locations,” said Ken Simonson, the association’s chief economist. “Job growth and pay increases in construction are outpacing those in the overall economy. But contractors continue to have difficulty finding qualified workers with the number of unemployed workers who have construction experience at the lowest December level in 19 years.” 

Construction employment totaled 7,352,000 in December, the highest level since March 2008. Employment in residential construction—comprising residential building and specialty trade contractors—inched up by 1,700 jobs for the month and 99,800 jobs over the past 12 months, a 3.6 percent increase. Employment in nonresidential construction—including building, specialty trades, and heavy and civil engineering construction—grew by 35,800 jobs in December and grew by 180,100 jobs during the past year, a 4.2 percent increase, the economist remarked. 

Hourly earnings in the industry averaged $30.44 in December, a rise of 3.9 percent from a year earlier, Simonson noted. Average hourly earnings in construction are now 10.8 percent higher than the average for all nonfarm private-sector jobs, which rose 3.2 percent in the past year, to $27.48.  

The unemployment rate for jobseekers with construction experience in December was 5.1 percent, down more from 5.9 percent in December 2017. The number of such workers fell to 493,000 from 554,000 a year earlier. Both figures were the lowest for December since the series began in 2000. 

In a survey the association released on Wednesday, 79 percent of construction firms reported that they expect to add employees in 2019. However, nearly as many—78 percent—reported they were having trouble filling some positions and 68 percent said they expected that hiring would remain difficult or become harder. Association officials cautioned, however, that contractors’ expansion plans could be undermined if Washington officials fail to make new investments in infrastructure or resolve trade disputes, particularly with China. 

“Contractors are raising pay and benefits and are investing in training and technology in order to keep pace with demand,” said Stephen E. Sandherr, the association’s chief executive officer. “But they are also counting on Washington officials to work together to improve aging and over-burdened infrastructure and resolve trade concerns to ensure the economy continues to expand.”