AGC: Construction employment down in January 2022

Construction employment dipped by 5,000 jobs between December and January, even as hourly pay rose at a record pace in 2021, according to an analysis of government data done by the Associated General Contractors of America (AGC).

Association officials say future job gains are at risk from several factors that slowing projects.

“Contractors are struggling to fill positions as potential workers opt out of the labor market or choose other industries,” says Ken Simonson, AGC’s chief economist. “In addition, soaring materials costs and unpredictable delivery times are delaying projects and holding back employment gains.”

Simonson notes that average hourly earnings in the construction industry increased 5.1 percent year-over-year, the largest 12-month increase in 15 years. The industry average of $33.80 per hour exceeded the private sector average by nearly 7 percent.

However, competition for workers has intensified as other industries have increased starting pay and offered working conditions not possible in construction, including flexible hours or work from home.

The industry has added 163,000 new jobs since January 2021, despite last month’s decline, but unemployment among former construction workers shrank by 229,000 in that time. This indicates workers are leaving the workforce altogether or taking jobs in other sectors, Simonson says.

Construction employment totaled 7,523,000 last month, 101,000 jobs (1.3 percent) less than the pre-pandemic peak in February 2020. Simonson says the totals mask large differences between residential and nonresidential segments.

Nonresidential construction firms lost 9,000 employees in January, and employment in the segment remains 213,000 below February 2020. Residential construction employment added 4,400 jobs in January and is 112,000 jobs ahead of February 2020.

Association officials say the Construction Hiring and Business Outlook survey it released in January showed most contractors expect to add employees in 2022 but overwhelmingly find it difficult to find qualified workers.

“Construction firms are struggling to find workers to hire, even as they are being forced to cope with rising materials prices and ongoing supply chain disruptions,” says Stephen Sandherr, AGC’s CEO. “But instead of addressing those challenges, the Biden administration is adding to these problems with a new executive order that will inflate the cost of construction, discriminate against most workers and undermine the collective bargaining process.”