Construction demand skews labor statistics, overall market

Construction was a bright spot in the 2018 national labor market, despite financial turmoil, recessionary expectations, and a fourth quarter government shutdown, according to a Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) analysis by the Construction Services Group of New York-based accountancy Marcum LLP.

Between January 2018 and January 2019, construction accounted for 12.5 percent or 338,000 of the 2.7 million net new jobs created year-over-year. That ratio edged even higher on a monthly basis in the early weeks of 2019, with construction adding more than 17 percent of all net new positions. “In January, the nation added another 304,000 net new jobs, blowing through a consensus estimate of around 170,000 new positions,” writes Anirban Basu in a report on the JOLTS analysis and serves as Marcum’s chief construction economist. “Construction was one of the big winners, single-handedly adding 52,000 net new jobs. Industry unemployment stood at 6.5 percent in January, a bit lower than it was a year earlier.”

The rapid start to the new year followed on the heels of a strong December, when construction added the most to the sum total of available job openings of any industry. In the final month of 2018, the sector added another 88,000 available, unfilled jobs, implying that filling available positions will become even more challenging in 2019. Basu notes that while the number of job openings in construction has surged, the number of net hires has not changed, “a reflection of the growing difficulty contractors are having filling the expanding number of open positions.”

“Interestingly, despite significant job creation, the nation’s construction unemployment rate ballooned from 4.5 percent in October to 7.8 percent in February,” he adds. “Much of this increase is seasonal, but there is some anecdotal evidence suggesting that it is at least partially due to renewed confidence among job-seekers in construction’s capacity to generate stable employment … The data are consistent with the notion that some of these workers are returning to construction.”

His report concludes that the current economic outlook is benign and points to the persistent low interest rates that have sustained economic momentum. “Were the inflation numbers to heat up, interest rates would be induced higher,” Basu observes.