Construction industry employment reached a five-year high in August as the sector added 20,000 jobs and its unemployment rate fell to 7.7%, the lowest rate for August in seven years, according to a recent analysis by the Associated General Contractors of America and the Associated Builders and Contractors.

“Construction employment growth has been accelerating and is broad-based,” said Ken Simonson, AGC’s chief economist. “The increase in the past 12 months was the largest since 2006 and was spread among residential, nonresidential building and heavy construction.”

Construction employment totaled 6,068,000 in August, the highest total since May 2009, with a 12-month gain of 232,000 jobs or 4.0%, more than double the 1.8% growth rate for total nonfarm employment, Simonson noted. Residential building and specialty trade contractors added a combined 13,200 employees since July and 123,100 (5.7%) over 12 months.

Nonresidential building and specialty trade contractors hired a net of 5,500 workers for the month and 76,200 (2.8%) since August 2013. Heavy and civil engineering contractors increased their headcount by 900 in August and 32,400 (3.7%) over the year.

“The headline number of 142,000 jobs for the overall U.S. economy was disappointing but the nonresidential construction numbers continue to show a steady recovery,” said Associated Builders and Contractors Chief Economist Anirban Basu.

“Employment among nonresidential specialty trade contractors expanded by 2,300 positions in August and nonresidential building construction was up by 3,200 jobs, which is consistent with ongoing expansion in demand for nonresidential construction services.”

“These job numbers, along with data this week on construction spending in July and reports from the Federal Reserve and the Institute of Supply Management, point to continued recovery by the construction sector,” Simonson commented. “However, the fact that the number of unemployed experienced construction workers is now at the lowest August level since 2007 means more contractors may soon have trouble filling key positions.”

The number of workers who said they looked for work in the past month and had last worked in construction fell to 678,000 in August. That was lower than in any August since 2007, when many contractors were forced to delay projects because they couldn’t find qualified workers.

Even as association officials welcomed the relatively positive employment figures, they noted the data reinforces the findings of a new survey that the association conducted with SmartBrief that found two-thirds of contractors are having a hard time finding qualified workers. The same survey also found one-in-four firms have passed on projects because of labor shortages.

“As contractors are starting to find it is easier to get work, it is becoming increasingly difficult to hire qualified workers,” said Stephen E. Sandherr, the association’s chief executive officer. “We need to make it easier for schools, local associations and private firms to establish programs that expose students to, and prepare them for, high-paying careers in construction.”

 “While the national construction unemployment rate inched up to 7.7%, construction is a segment in which many executives complain about a lack of available skilled workers and rising unemployment must be interpreted more broadly,” said Basu. “The industry has a high demand for jobseekers and increasing demand for construction workers implies that many of these jobseekers will find employment. Moreover, the industry’s unemployment rate has fallen 1.4% from where it stood one year ago.”

According to the Bureau of Labor Statistics' household survey, the national unemployment rate shed a tenth of a percentage point, falling to 6.1%. This small change is partially explained by a decline in the labor force, which shrank by 64,000 in August, pushing the labor force participation rate down to 62.8%.

Construction employment for the month and the past year breaks down as follows:

• Nonresidential building construction employment gained 3,200 jobs for the month and is up by 27,900 jobs, or 4.2%, since August 2013.

• Residential building construction employment rose by 4,000 jobs in August and is up by 55,900 jobs, or 9.1%, on an annual basis.

• Nonresidential specialty trade contractors added 2,300 jobs for the month and employment in that category is up by 48,300 jobs, or 2.3%, from the same time a year ago.

• Residential specialty trade contractors gained 9,200 jobs in August and have added 67,200 jobs, or 4.3%, since August 2013.

• The heavy and civil engineering construction segment added just 900 jobs in August, but job totals are still up by 32,400, or 3.7%, on a year-over-year basis.