WASHINGTON, D.C., Feb. 5—The U.S. construction industry’s unemployment rate rose to 8.5 percent in January, the highest level since March of 2015, according to an analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors (ABC). The unemployment rate across all industries shed a tenth of a percentage point and now sits at 4.9 percent, the lowest level since February of 2008.

The construction industry added 18,000 net new jobs in January and 264,000 over the past twelve months, a 4.2 percent increase. The nonresidential construction sector added only 2,900 jobs in January after adding 16,200 jobs in December (revised downward from 16,400 new jobs) and 17,100 new jobs in November.

January’s nonresidential figure was hampered by jobs losses in the nonresidential specialty trade contractor subsector, which lost 2,400 jobs for the month. The residential sector added 20,100 net new jobs, while the heavy and civil engineering segment lost 5,200 jobs.  

“The headline for January is that the U.S. economy added 151,000 jobs and overall unemployment fell to 4.9 percent, but the more interesting and important information can be found beneath the surface,” said ABC Chief Economist Anirban Basu. “Unlike the balance of the economy, which was associated with declining unemployment in January, construction’s unemployment rate swelled by a full percentage point during the month.

“However, one could still view the report as positive from the perspective of the typical contractor,” said Basu. “Contractors have been wrestling with shortfalls in appropriately trained workers. The implication is that more people are beginning to realize there are growing opportunities to find work in the industry. It is also likely that the rising unemployment rate is a reflection of large numbers of dislocated energy workers now looking for work in occupations where their skill sets translate.

“There are also reasons to place less weight on weakness in nonresidential job creation in January,” said Basu. “First, seasonal factors wreak havoc on construction data this time of year. Second, much of the weakness was in heavy and civil engineering, which by most accounts can look forward to a brighter future, given recent federal funding commitments. For now, the nonresidential construction recovery remains in place, but there are indications that cracks are forming in the ongoing economic recovery, and that those cracks could widen further as the year progresses.”

• Nonresidential building construction employment expanded by 5,300 jobs in January and is up by 12,100 jobs or 1.7 percent on a year-over-year basis.
• Residential building construction employment expanded by 7,500 jobs in January and is up by 28,900 jobs or 4.2 percent on a year ago basis.
• Nonresidential specialty trade contractors lost 2,400 jobs for the month but employment in that category is up by 95,800 jobs or 4.2 percent from the same time one year ago.
• Residential specialty trade contractors added 12,600 net new jobs in January and have added 120,600 jobs or 7.0 percent since January 2015.
• The heavy and civil engineering construction segment lost 5,200 jobs in January but is up by 7,100 positions or 0.8 percent on a year-over-year basis.