ABC: Construction employment near pre-pandemic levels

The construction industry added more than 60,000 jobs on in February, according to an Associated Builders and Contractors (ABC) analysis of data released by the U.S. Bureau of Labor Statistics.

Overall, ABC says the industry has recovered nearly all (99 percent) of the jobs lost during earlier stages of the pandemic.

Nonresidential construction employment added 29,400 jobs in February, with all three subsectors experiencing growth, and is up 3.9 percent over the past twelve months. The residential sector added 31,000 jobs in February and is up 4.5 percent since year-over-year.

Construction unemployment fell to 6.7 percent in February. Unemployment across all industries declined to 3.8 percent, down from 4 percent in January.

“The U.S. economy is charging into the post-pandemic world with significant momentum, and nonresidential construction is part of that story,” says Anirban Basu, ABC’s chief economist. “At the heart of America’s economic momentum is rapid workforce growth, with more people re-entering the workforce to take advantage of higher wages and to better contend with rapidly rising prices.”

Basu adds that evidence points to contracts having a somewhat easier time filling available positions as of late. He also says that supply chain issues are beginning to improve, though the conflict between Russia and Ukraine could create new issues within the supply chain.

Nonetheless, Basu’s outlook on 2022 remains positive.

“With demand strong and the supply side of the economy in repair, 2022 is setting up to be a strong year for contractors,” he says. “At some point, federal infrastructure dollars will begin to flow more freely, and that will help support additional contractor backlog, which declined to 8 months in ABC’s latest Construction Backlog Indicator report.”

The coming year will not be without its fair share of headwinds, however.

“There remain many reasons for concern,” Basu says. “Despite stepped-up federal investment in infrastructure, overall federal spending will be down sharply in 2022, creating substantial fiscal drag. Inflation has been draining households of accumulated savings and could trigger rapid slowing in consumer outlays. Interest rates are poised to rise as the Federal Reserve readies itself to deal more forcefully with what has turned out to be nontransitory inflation.

“Elevated oil prices are likely already doing damage to the economy, damage that is not yet apparent in key macroeconomic indicators,” he adds. “Elevated oil and other prices are also driving the cost of delivering construction services higher, which could result in the postponement or cancellation of some projects.”