The U.S. construction industry added 23,000 net new jobs in August, an increase from the 18,000 net new jobs added in July, according to an ABC analysis of data supplied by the U.S. Bureau of Labor Statistics. The industry has added 297,000 net new jobs since August 2017, a 4.3 percent increase. Nonresidential construction employment increased by 9,600 net jobs in August, although the heavy and civil engineering category lost 200 net jobs for the month.
The construction industry unemployment rate remained unchanged at 3.4 percent in August and remains at its lowest level in the 18-year history of the series. The national unemployment rate for all industries also remained unchanged at 3.9 percent.
“Today’s employment report confirms what many economists believe—the July jobs report was an anomaly and the U.S. economy remains stable,” said ABC Chief Economist Anirban Basu. “While the economy added an impressive 201,000 net new jobs in August, the real story is wage growth—average hourly wages are now at their highest level since June 2009. Economists and others have been warning about mounting wage pressures for quite some time, and today’s report supplies additional information indicating that such concerns are warranted.
“Given the ongoing momentum of the U.S. labor market, elevated levels of consumer and business confidence and the impacts of tax reform, construction firms can expect plentiful bidding opportunities during the months ahead,” said Basu. “Presently, there are very few indications of economic stagnation, with financial markets continuing to signal solid corporate performance during the quarters ahead.
“That said, in economics, no set of circumstances can be viewed as purely positive. Skilled labor shortages will continue to worsen, driving compensation costs higher,” said Basu. “This, along with rising materials prices, will tend to drive construction costs higher, which may eventually undermine the volume of construction starts. Moreover, borrowing costs will continue to rise as the economy expands along with wages. This will place additional pressures on developers and others who endeavor to move forward with construction projects. For now, such concerns are secondary to the current robust economic momentum.”