The construction industry has always been a significant contributor to the U.S. economy, and recent trends suggest that its influence is only growing. In June 2023, the industry saw an increase of 23,000 jobs, according to an analysis by the Associated Builders and Contractors (ABC) of data released by the U.S. Bureau of Labor Statistics. This growth is part of a larger trend, with industry employment rising by 198,000 jobs since June 2022, a 2.6% increase, bringing the total to 7.947 million.
The nonresidential construction sector, a key component of the industry, saw an increase of 12,200 positions. This growth was driven by two of the three subcategories: heavy and civil engineering, which added 7,300 positions, and nonresidential building, which added an additional 5,400 jobs. However, nonresidential specialty trade contractors saw a slight decrease, losing 500 jobs on net.
As of July 2023, the construction industry is experiencing a high demand for several job roles. According to a report by Construction Dive, the following positions are the most in-demand:
- Construction Project Managers: These professionals are responsible for planning and overseeing construction projects from start to finish. They ensure projects are completed on time, within budget, and meet quality standards.
- Cost Estimators: Cost estimators are crucial in the planning phase of construction projects. They calculate the cost of materials, labor, and equipment needed for a project and help determine its profitability.
- Plumbers and Electricians: Skilled tradespeople, such as plumbers and electricians, are always in high demand in the construction industry. These professionals install and repair systems essential for the functionality of buildings.
- Carpenters: Carpenters are needed for a variety of tasks in construction, including building frameworks, installing structures and fixtures, and constructing building exteriors and interiors.
- Construction Laborers: These workers perform many tasks that require physical labor on construction sites. Their duties may include loading and unloading materials, assembling and breaking down barricades, and cleaning and preparing sites for work.
- Heavy Equipment Operators: These professionals operate heavy machinery used in construction, such as bulldozers, forklifts, backhoes, dump trucks, cargo trucks, and hydraulic truck cranes.
The demand for these roles is driven by a combination of factors, including a surge in construction projects, an aging workforce, and a shortage of skilled workers entering the industry. As a result, companies are actively seeking qualified individuals to fill these positions.
ABC Chief Economist Anirban Basu commented on these trends, noting that despite a significant increase in the federal funds rate over the past year, the construction industry continues to add thousands of jobs each month. He pointed out that contractors have collectively added jobs in 15 of the past 16 months, and ABC’s Construction Confidence Index suggests they will continue to increase staffing levels through the remainder of the year.
Labor Shortages Continue to Be a Challenge for Employers
However, Basu also warned of the challenges posed by labor shortages, which will continue to provide a stiff headwind to hiring. Despite the slight increase in the construction unemployment rate to 3.6% in June, this is still the second-lowest rate on record. Across all industries, unemployment remains near a 50-year low, and the prime age (24-54) employment-to-population ratio rose to the highest level since 2001.
The construction industry continues to show robust growth, adding thousands of jobs each month despite the challenges posed by labor shortages and rising interest rates. However, as Basu warns, the cumulative effects of inflation and high interest rates will eventually catch up with the economy. For now, though, the labor market remains overheated, and the construction industry is a significant part of that trend.