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ABC: Construction job openings, unemployment down in June

By |  August 3, 2022

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The construction industry had 334,000 job openings in June, according to an Associated Builders & Contractors (ABC) analysis of data from the U.S. Bureau of Labor Statistics’ Job Opening & Labor Turnover Survey (JOLTS).

JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings decreased by 71,000 from May but are up 13,000 from the same time last year.

In June, construction workers quit their jobs at a faster rate (2.3 percent) than they were laid off or discharged (1.7 percent). June was the 16th consecutive month in which quits outpaced or equaled layoffs and discharges.

“While debate regarding whether or not the United States is in recession rages on, one thing appears clear: the U.S. economy is poised to slow,” says Anirban Basu, ABC’s chief economist. “What had been an economy beset largely by issues of supply is now becoming one faced with both supply chain issues and weakening demand for goods and services.”

He adds that construction faced some of the sharpest reductions in openings in June.

“In May, the national construction industry had 405,000 available, unfilled jobs,” Basu says. “By June, this number had declined to 334,000. While that remains a significant number of job openings, demand for workers is clearly fading due to rising borrowing costs, increasingly pervasive pessimism and growing risk of recession. These factors have diminished contractor profit margin expectations, as indicated by ABC’s Construction Confidence Index.”

The combination of long hours and shift work can result in a tired or fatigued workforce. Photo: Nalinee Supapornpasupad/IStock / Getty Images Plus/Getty Images

Construction unemployment was down 3.8 percent in June from a year earlier. Photo: Nalinee Supapornpasupad/IStock / Getty Images Plus/Getty Images

Unemployment

The not-seasonally-adjusted (NSA) national construction unemployment rate plunged 3.8 percent in June from a year earlier, down from 7.5 percent to 3.7 percent. Meanwhile, all 50 states had lower unemployment rates over the same period, according to a state-by-state analysis of U.S. Bureau of Labor Statistics data released by ABC.

Ten states had an estimated construction unemployment rate under 2 percent, while the highest unemployment rate was 6.5 percent in New Mexico.

In June, national NSA payroll construction employment was 301,000 jobs higher than a year ago and was 46,000 higher than its pre-pandemic peak.

Residential construction employment has fully recovered while nonresidential construction employment remains below its pre-pandemic peak. June seasonally-adjusted residential payroll construction employment was 112,000 jobs above its pre-pandemic peak, while nonresidential payroll construction employment was 66,000 below its pre-pandemic peak.

The national NSA construction unemployment rate of 3.7 percent was down 0.3 percent in June 2022 from its June 2019 reading. Over that same period, 32 states had lower construction unemployment rates and 18 states had higher rates.

“The industry is confronting rising interest rates, slowing national economic growth and the possibility of a recession in the future,” says Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Further, supply chain disruptions due to the Russia-Ukraine war continue, resulting in more caution in both residential and nonresidential construction. On the plus side, infrastructure construction activity will ramp up over the next several years as funds flow from the federal government from implementation of the 2021 Infrastructure Investment & Jobs Act.”

Monthly fluctuations

National and state unemployment rates are best evaluated on a year-over-year basis because these industry-specific rates are not seasonally adjusted. However, month-to-month comparisons offer a better understanding of the rapidly changing economic environment on construction employment, though care must be used in drawing conclusions from these numbers.

Since the data series began in 2000, national NSA construction unemployment rates have generally fallen from May to June. June 2022 posted another decline, down 0.1 percent from May. Twenty-nine states had lower estimated construction unemployment rates than in May, 19 states had higher rates and two (Mississippi and South Carolina) had the same rate.

The five states with the lowest June 2022 estimated NSA construction unemployment rates were: Idaho and Nebraska (0.9 percent), South Dakota (1.3 percent), Utah, (1.5 percent) and Minnesota (1.6 percent). Idaho, Minnesota and Nebraska each posted their lowest June estimated NSA construction unemployment rate on record.

The states with the highest June 2022 estimated NSA construction unemployment rates were: Delaware, which measures construction, mining and logging combined (5.4 percent), Michigan (5.7 percent), New York (5.8 percent), West Virginia (6.3 percent) and New Mexico (6.5 percent).

This was the third month in a row that all states posted construction unemployment rates below 10 percent. Michigan posted its lowest June estimated construction unemployment rate since June 2018 and New Mexico had the largest year-over-year improvement in its unemployment rate, down 7.9% from June 2021.

Jack Kopanski

About the Author:

Jack Kopanski is the Managing Editor for Pit & Quarry and Portable Plants. Kopanski can be reached at 216-706-3756 or jkopanski@northcoastmedia.net.

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