Construction adds 16K new jobs in June

Dive Brief:

  • Construction employment saw a strong bump in June, increasing by 16,000 net new jobs for the month, the Bureau of Labor Statistics reported Friday.
  • The month's total construction employment of 6.896 million represented a 206,000-position — or 3.08% — increase from June 2016.
  • Within the industry, the residential sector shed 1,500 positions, while nonresidential (including the heavy civil and engineering sectors) lost 700 jobs during the period. Specialty trade contractors drove last month's employment growth, with 18,500 new positions added in June.

1d516c0e39199a26ecf071bdfeb30818Despite the gradual two-month rise in construction employment, job growth in the industry remains unsteady as firms struggle to fill their worker pipelines. While the industry saw a 10-high employment level earlier this year, labor force participation slumped to a multimonth low in May, indicating that construction companies will continue to face labor shortage challenges.

A bump in May's Architecture Billings Index, particularly in the multifamily residential and mixed-practice sectors, points to growth in construction in the coming months and, with it, demand for skilled workers. Renewed optimism in design services was likely spurred on in part by the Trump administration's budget proposal, which would have allocated $200 billion to transportation projects over the next decade, in turn, generating $1 trillion in new investments for the country's decaying infrastructure. That proposal, however, could be pushed to the backburner until 2018, according to Sen. John Thune, R-SD and chairman of the Commerce, Science and Transportation Committee, as legislators rush to solidify solutions around issues such as tax reform, healthcare, the debt ceiling and other government spending programs.

While industry observers wait out uncertainty surrounding the infrastructure plan and the timeline of its implementation, firms working on rural infrastructure projects or those that receive private or non-federal funding could get a boost as the administration's new priority, according to the the U.S. Department of Transportation. The department has said it will amend the former FASTLANE (Fostering Advancements in Shipping and Transportation for the Long-term Achievement of National Efficiencies) grant program to favor projects that use "innovative approaches."

Firms in the residential sector are still likely to hit obstacles as housing starts and building permits — indicative of future work — lag demand amid supply-side headwinds from the lot and labor shortage. May's starts reached their lowest levels in eight months, while permits for the month hit their lowest mark in more than a year. Builders' mounting frustration with being unable to find skilled labor and available lots took a toll on their confidence in the market for new single-family homes in June, and, now, sliding employment figures suggest that growth in the segment's employment figures could continue to struggle.

This article originally appeared in Construction Dive.

NewsGrant Prettyman