Construction employment expanded by 46,000 net new jobs in November after adding 34,000 jobs in October (revised upward by 3,000), according to a recent analysis by industry economists of the November employment release from the U.S. Dept. of Labor.

Nonresidential construction employment increased by 9,300 jobs in November after adding 19,400 jobs during the previous month (revised downward from 20,100). The residential construction sector added 32,100 positions in November after adding just 8,500 jobs in October.

In the aggregate, construction employment increased by 0.7% for the month, more than in any other industry. Leisure and hospitality was a distant second at 0.3%. The construction industry’s unemployment rate was unchanged, holding steady at 6.2% in November.

“This jobs release clearly shows that various construction segments continue to gain momentum and that contractors will continue to scramble to secure properly trained human capital,” said Associated Builders and Contractors Chief Economist Anirban Basu. “The combination of November’s strong performance and the upward revision to job creation estimates for prior months tells us that the brief slowdown in economy-wide hiring during the late summer is no longer a source of significant concern and serves as confirmation that the Federal Reserve will begin raising rates later this month.”
 

Nonbuilding Sector Jobs

Heavy and civil engineering construction, which covers highway building and many other types of infrastructure work, expanded at a slower rate than other industry segments, adding only 4,600 jobs in November and 26,000 for the year. But Ken Simonson, chief economist at the Associated General Contractors of America, noted that the recent passage of a new multi-year surface transportation measure should help boost employment in that sector as state and local officials are now able to plan larger, multi-year projects.

November marks the second month of large increases in construction employment, following several months of relatively little construction employment growth, Simonson said. The recent surge in construction employment could indicate that firms are having more success recruiting and hiring new workers after months of struggling to cope with worker shortages, he said.

“Construction firms appear to be having an easier time finding workers to hire after months of struggling with worker shortages,” Simonson added. “Between accelerating construction spending and new transportation investments coming online, construction employment should continue to grow at a steady rate for the next several months.”

But the continued steady employment growth could also mean a further increase in wages. “There are a number of additional implications,” Basu said. “One is that construction wage pressures will continue to build in 2016. Construction is hardly alone, with a growing roster of industries reporting hiring challenges. It has now become quite common for corporations to shut down operations in smaller communities because of an inability to properly staff offices or other facilities.

“One of the most interesting aspects of this report was additional evidence of public-sector support for nonresidential construction’s recovery,” said Basu. “A year ago, the segment’s recovery was almost entirely driven by expansion in private funding for construction projects. With state and local government finances improving, the nonresidential construction sector has acquired an additional source of momentum. This is reflected in part in the 4,600 jobs added in the heavy and civil engineering segment in November.”

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

• Nonresidential building construction employment grew by 100 jobs in November and is up by 13,600 jobs or 1.9% on a yearly basis.

• Residential building construction employment expanded by 6,300 jobs in November and is up by 26,400 jobs or 3.9% on a year-over-year basis.

• Nonresidential specialty trade contractors added 9,200 jobs for the month, and employment in that category is up by 91,600 jobs or 4.1% from the same time a year ago.

• Residential specialty trade contractors added 25,800 net new jobs in November and have added 101,700 jobs or 6.0% since November 2014.

• The heavy and civil engineering construction segment added 4,600 jobs in November and is up by 26,000 positions or 2.8% on a year-over-year basis.