ABC: Construction employment up in October

The construction industry added 1,000 jobs in October, according to an Associated Builders & Contractors (ABC) analysis of government data.

Year over year, industry employment has risen by 266,000 jobs, an increase of 3.6 percent, according to ABC.

Nonresidential construction employment increased by 300 positions, with growth in only one of the three subcategories. Nonresidential building added 3,200 new jobs, while nonresidential specialty trade and heavy and civil engineering lost 2,500 and 400 jobs, respectively.

The construction unemployment rate rose to 4.1 percent in October, while unemployment across all industries rose from 3.5 percent in September to 3.7 percent last month.

“The country’s job market remains strong, and that means we remain in a bad place because, in this economic environment, good news is bad news and vice versa,” says Anirban Basu, ABC’s chief economist. “We can expect to hear many such ironic statements during the months ahead. A few days ago, we learned that America had 10.7 million available, unfilled jobs in September. More than 400,000 of these are construction industry job openings. Employers continue to hire, with the overall economy adding 261,000 jobs in October.”

Basu adds that for inflation to return to its 2 percent target, the demand for labor needs to weaken. The country is not there yet, which he says means rising interest rates will continue

“Among other things, that stands to weaken demand for construction services as borrowing costs ramp higher amid ongoing labor shortages and elevated materials prices,” Basu says. “Due to those factors, the construction industry added just 1,000 net new jobs last month, the slowest growth since April.

“The good news is that bad news will eventually arrive,” he adds. “As the economy slows further and recessionary conditions take hold, inflation will dissipate as demand for goods and services weakens. While it is unfortunate that economic stakeholders have to wait for bad news before good news arrives, contractors still have healthy backlogs, according to ABC’s Construction Backlog Indicator, and that will carry many through 2023 even if a recession arrives in America next year.”