Construction Economics
Construction Jobless Rate Hits 9-Year Low but Industry Loses Jobs
Unemployment rate drops to 5.2% from April's 6% and year-earlier 6.7%
Construction’s unemployment figures for May sent mixed signals, as the industry saw its jobless rate plunge to its lowest monthly level in more than nine years, but also experienced a loss of 15,000 jobs, the Labor Dept. has reported. Construction economists said the numbers reflect a continued shortage of qualified workers in the industry.
The federal Bureau of Labor Statistics’ employment report, released on June 3, showed that construction’s jobless rate tumbled to 5.2% in May from April’s 6.0%. The figure also was down sharply from the May 2015 level of 6.7%.
The 5.2% rate was the industry’s lowest since October 2006, when it was 4.5%. The BLS rates aren’t adjusted for seasonal variations.
But the BLS report for May also had sobering news for construction: a loss of 15,000 jobs during the month. The only segment to post a gain was nonresidential specialty trade contractors, which added 3,000 positions.
Otherwise, the jobs arrows all pointed downward. The largest loss came in heavy and civil engineering construction, which shed 8,200 jobs. The buildings sector lost 6,300.
Anirban Basu, Associated Builders and Contractors chief economist, called the BLS report "earth-shattering." Basu said in a statement that the combination of job losses and a decrease in the industry's unemployment rate "signals the worsening of the industry-wide skilled-labor shortage."
But Ken Simonson, Associated General Contractors of America chief economist, had a more positive view of the new data. He pointed out in a statement, "Average pay in construction is rising faster than in the rest of the private sector and the number of unemployed construction worker was at the lowest May level in 16 years." He added, "These facts support what contractors tell us: they have plenty of work but are struggling to find qualified workers to hire."
AGC noted that total construction employment was more than 6.6 million in May, up 3.4% year over year.
One upbeat note came in architectural and engineering services—a separate BLS category—which added 2,100 jobs during May.
BLS also reported that the overall U.S. unemployment rate declined in May to 4.7% from April’s 5.0%. But the economy added only 37,000 jobs in the month.
Story updated 6/3/16 p.m. with industry economists' comments
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