February was the best month for construction employment gains since March 2007, according to ABC's analysis of an employment report from the U.S. Bureau of Labor Statistics (BLS). The sector added 61,000 net new jobs on a monthly basis in February, an increase of 0.9 percent, and 254,000 net new jobs on a yearly basis, an increase of 3.7 percent.
Nonresidential construction added 35,400 net new jobs in February after adding 21,000 net new jobs in January. Although gains were widespread among all five major construction subsectors, nonresidential specialty trade contractors outperformed them all with 19,000 net new jobs.
The construction industry unemployment rate, which is available only on a non-seasonally adjusted basis, increased by half a percentage point in February and stands at 7.8 percent. Despite the month-over-month increase, which is likely attributable to seasonal factors, the industry’s unemployment rate is a full percentage point lower than at the same time one year ago. The national unemployment rate for all industries remained unchanged at 4.1 percent.
“Today’s employment report could scarcely have been better,” said ABC Chief Economist Anirban Basu. “In addition to a massive top-line number, construction employment surged by 61,000 net new jobs. In other words, construction was responsible for approximately one-fifth of net new job creation in February. On top of that, nonresidential construction accounted for the majority of net new construction jobs. Nonresidential construction job creation was broad based—supported by nonresidential builders, heavy and civil engineering, and specialty trade contractors alike.
“This is hardly where the good news ends,” said Basu. “Labor force participation rose and the national unemployment rate remained at 4.1 percent for a fifth consecutive month. Worker compensation also expanded, but not in a way that suggests problematic inflation. While the construction industry unemployment rate increased to 7.8 percent, this is the lowest observed rate in February since BLS began tracking the industry’s unemployment rate in 2000.”
“ABC has been indicating that 2018 would represent the best year for the U.S. economy since at least 2005,” said Basu. “The February jobs report strongly implies that prediction likely will prove to be correct. Today’s numbers should fuel additional consumer and business optimism, which should set the stage for strong construction spending and lofty backlog during the months ahead. That said, broader issues regarding inflation remain, including inflation potentially generated through the imposition of trade restrictions by major world economies.”