That was the response of Brian Coulton, chief economist at credit rating agency Fitch, to the U.S. Bureau of Labor Statistics' surprisingly strong July jobs report. He noted further that the U.S. economy is creating new jobs at an annual rate of 6 million, or "three times faster than what we normally see historically in a good year."
Indeed, predictions of a coming economic slowdown failed to materialize in July, according to the BLS report, released Aug. 5, which showed that U.S. jobs surged by 528,000, or more than twice the figure expected by some economists.
For its part, the construction industry also bucked predictions of a coming slowdown, and instead posted across-the-board jobs gains in all sectors to add an estimated 32,000 positions overall during the month. As a result, industry unemployment inched downward from June's 3.6% rate to 3.5%—its lowest July rate in four years, according to AGC of America—and was well below its year-ago figure of 6.1%.
As they did in June, specialty trade contractors led the way, adding 21,500 of construction's overall 32,000-job gain in July. A notable gain of 11,200 positions among residential specialty contractors marked a rebound from the prior month, when BLS reported just 400 jobs added. That June estimate was later revised downward to show a decline.
In the nonresidential sector, specialty trade contractors added 10,300 positions during July.
Building contractors added 7,800 positions overall in July, with nonresidential firms contributing an estimated 4,900 jobs to that overall total. As was the case with specialty contractors, residential building jobs also rebounded from a June decline, adding an estimated 2,900 positions overall.
Heavy and civil engineering contractors also contributed to construction's overall gain, adding 3,100 positions during July.
Demand Slowing or Growing?
Construction industry groups expressed differing perspectives on the positive July numbers.
Stephen E. Sandherr, CEO of AGC of America, said industry firms "are doing their best to add new workers to keep pace with strong demand for construction," adding that "job gains would have been even higher if there were more people available to hire.”
Just days prior, however, Anirban Basu, chief economist for Associated Builders and Contractors, had noted in an Aug. 2 press release on construction job openings that "demand for workers is clearly fading due to rising borrowing costs, increasingly pervasive pessimism and growing risk of recession."
Responding to the BLS jobs report, Basu remarked that potential headwinds still await.
“Yes, the construction industry also added a healthy number of jobs in July, but the impact of macroeconomic deterioration is already apparent in other construction data," he said. "Ongoing weakness in certain commercial real estate segments, sky-high materials prices and shortages of skilled construction workers have forestalled a growing number of projects by suppressing demand at a time when the cost of delivering construction services remains elevated."
One contractor so far not seeing declining demand is Larry Rooney, president of Tulsa, Okla.-based Manhattan Construction Group.
"We continue to see project opportunities in all sectors," Rooney told ENR, noting that he expects demand to remain stable or increase in almost all company markets, which include aviation, municipal, healthcare, commercial, entertainment, federal and higher education, among others.
Additionally, Rooney says, "We have exceeded our planned procurement and backlog projections for 2022."
On the subject of workforce challenges, the contractor agrees with both Sandherr and Basu, noting that "the battle for job candidates is intense" and now requires "a mix of tactics to find the best people."
Rooney says those tactics include "expanding our candidate searches into wider geographies, further diversifying our targeted degree programs and trade schools, enhancing our internship program, increasing our benefits package and promoting our referral program.”