Continuing softness in broader labor market could benefit contractors, ABC economist says
The Bureau of Labor Statistics’ August 7 report showing a surprising overall loss of 23,000 jobs could have been worse if not for construction companies, who added an estimated 22,000 positions last month. Among goods-producing companies, construction was one of just two industries reporting job gains in July, with manufacturers adding a reported 5,000 new positions, according to BLS.
Specialty trade contractors led last month’s construction jobs increase, filling an estimated 18,000 open positions. Of that number, 15,400 jobs were with nonresidential specialty contractors, with residential specialty contractors adding 2,600 positions.
Meanwhile, building contractors added an estimated 3,700 workers in July, and heavy/civil engineering contractors added 400.
“Nonresidential construction employment continued to expand at a healthy pace in July as the data center investment boom fuels ongoing demand for specialty trade contractors,” said ABC Chief Economist Anirban Basu in a press release.
Calling construction’s job gains «not particularly surprising,» Basu added that «the unexpected loss of economywide jobs in July—the first since February—and massive downward revisions to the prior two months of growth signal emerging labor market weakness.
«If this soft labor market persists,» he continued, «it will benefit the construction industry in the form of lower borrowing costs.»
While noting that July’s addition of 22,000 workers was the largest monthly increase since March, Ken Simonson, chief economist with Associated General Contractors of America, warned in a press release that «any interruption in funding for highways or permitting for data centers would lead to layoffs in several parts of the industry.”
Looking for quick answers on construction and engineering topics?
Try Ask ENR, our new smart AI search tool. Ask ENR →
AGC’s press release warned that «any delay in passing a new federal transportation bill will make it hard for transportation officials to plan significant new projects.»
Jeffrey D. Shoaf, AGC of America CEO, added, «The construction sector is one of the few bright spots in this month’s jobs report, largely because of strong demand for public and technology infrastructure projects. It would be a shame for politics to undermine construction demand at a time when so many new people are entering high-paying careers in construction.”
