Construction Industry Unemployment Rate Dips to 15.7 Percent in February
Summary
The construction industry added 48,000 jobs in February—the largest monthly increase since March 2007. Year over year, the industry has added 140,000 jobs, or 2.5 percent, according to the March 8 employment report by the U.S. Labor Department. The construction industry unemployment rate declined to 15.7 percent in February, down from 16.1 percent the previous month and down from 17.1 percent from one year ago.
The nonresidential building sector added 6,200 jobs for the month and has added 20,600 jobs, or 3.1 percent, during the last 12 months. Nonresidential specialty trade contractors added 14,600 jobs last month and the segment has added 23,000 jobs, or 1.1 percent, during the past year. Heavy and civil engineering construction employment increased by 8,200 jobs in February and is up by 32,100 jobs, or 3.7 percent, compared to February 2012.
Residential building construction added 2,300 workers in February, but has only added 400 jobs, or 0.1 percent, compared to the same time one year ago. Many of the jobs added during the past year show up in the residential specialty trade contractors segment, which gained 17,100 jobs in February and has added 63,800 jobs, or 4.3 percent, during the past 12 months.
Across all industries, the nation added 236,000 jobs as the private sector expanded by 246,000 jobs and the public sector shrunk by 10,000 jobs. The consensus estimate had been approximately 160,000 jobs, which means the nation added nearly 50 percent more jobs for the month than economists and investors anticipated.
Overall, the nation’s unemployment rate was 7.7 percent in February, down from 7.9 percent in January.
Analysis
“Despite worries over automatic sequestration, high gas prices, the end of the payroll tax increase and a number of tax increases, the U.S. economy appears to be gaining momentum,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Thanks to rising home and corporate equity prices, total U.S. household wealth appears to have established an all-time high.
“Corporate earnings remain solid, and for the most part balance sheets remain healthy,” added Basu. “Data also indicate that lending standards are easing, including with respect to commercial real estate. After today’s jobs report release, U.S. stock futures climbed higher.
“Perhaps even more surprising than the overall employment report was the performance of the construction industry, which ranked second in terms of job growth behind only professional and business services in February,” Basu said. “Job growth was reported in every significant construction segment, with specialty trade contractors responsible for approximately two out of every three jobs added last month.
“Heavy and civil engineering, often thought to be a leading indicator for the overall nonresidential construction sector, added 8,200 jobs in February, which represents a meaningful acceleration over prior months,” said Basu. “With the broader economy still gathering momentum and with leading indicators for both residential and nonresidential construction remaining positive, there is reason to believe that further construction job growth is ahead.
“This is not to suggest that the economy is completely out of the woods,” Basu added. “The effects of automatic sequestration, which represents roughly $44 billion in federal spending cuts during the next seven months—and then additional cuts beyond that—will gradually seep into the economy and potentially cause it to decelerate during the second quarter.
“But for now, economic performance is exceeding expectations and overall job creation is becoming more brisk even as the nation continues to trim aggregate public sector employment,” said Basu.
The construction industry added 48,000 jobs in February—the largest monthly increase since March 2007. Year over year, the industry has added 140,000 jobs, or 2.5 percent, according to the March 8 employment report by the U.S. Labor Department. The construction industry unemployment rate declined to 15.7 percent in February, down from 16.1 percent the previous month and down from 17.1 percent from one year ago.
The nonresidential building sector added 6,200 jobs for the month and has added 20,600 jobs, or 3.1 percent, during the last 12 months. Nonresidential specialty trade contractors added 14,600 jobs last month and the segment has added 23,000 jobs, or 1.1 percent, during the past year. Heavy and civil engineering construction employment increased by 8,200 jobs in February and is up by 32,100 jobs, or 3.7 percent, compared to February 2012.
Residential building construction added 2,300 workers in February, but has only added 400 jobs, or 0.1 percent, compared to the same time one year ago. Many of the jobs added during the past year show up in the residential specialty trade contractors segment, which gained 17,100 jobs in February and has added 63,800 jobs, or 4.3 percent, during the past 12 months.
Across all industries, the nation added 236,000 jobs as the private sector expanded by 246,000 jobs and the public sector shrunk by 10,000 jobs. The consensus estimate had been approximately 160,000 jobs, which means the nation added nearly 50 percent more jobs for the month than economists and investors anticipated.
Overall, the nation’s unemployment rate was 7.7 percent in February, down from 7.9 percent in January.
Analysis
“Despite worries over automatic sequestration, high gas prices, the end of the payroll tax increase and a number of tax increases, the U.S. economy appears to be gaining momentum,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Thanks to rising home and corporate equity prices, total U.S. household wealth appears to have established an all-time high.
“Corporate earnings remain solid, and for the most part balance sheets remain healthy,” added Basu. “Data also indicate that lending standards are easing, including with respect to commercial real estate. After today’s jobs report release, U.S. stock futures climbed higher.
“Perhaps even more surprising than the overall employment report was the performance of the construction industry, which ranked second in terms of job growth behind only professional and business services in February,” Basu said. “Job growth was reported in every significant construction segment, with specialty trade contractors responsible for approximately two out of every three jobs added last month.
“Heavy and civil engineering, often thought to be a leading indicator for the overall nonresidential construction sector, added 8,200 jobs in February, which represents a meaningful acceleration over prior months,” said Basu. “With the broader economy still gathering momentum and with leading indicators for both residential and nonresidential construction remaining positive, there is reason to believe that further construction job growth is ahead.
“This is not to suggest that the economy is completely out of the woods,” Basu added. “The effects of automatic sequestration, which represents roughly $44 billion in federal spending cuts during the next seven months—and then additional cuts beyond that—will gradually seep into the economy and potentially cause it to decelerate during the second quarter.
“But for now, economic performance is exceeding expectations and overall job creation is becoming more brisk even as the nation continues to trim aggregate public sector employment,” said Basu.