Construction employment expanded by 5,000 net new jobs in November, according to an analysis of U.S. Bureau of Labor Statistics data conducted by ABC. During the past 12 months, the industry has added 282,000 net new construction jobs, which translates into a 4 percent increase in total industry-wide employment.
Nonresidential construction employment declined by 3,600 net new jobs last month. Job losses were split between the nonresidential building subsector (down 800) and nonresidential specialty trade contractors (down 3,000), while heavy and civil engineering added 200 net new jobs.
Construction unemployment rose to 3.9 percent in November, 0.3 percentage points higher than the previous month. However, industry unemployment is 1.1 percentage points lower compared to the same time last year. The official national unemployment rate remained unchanged at 3.7 percent.
“Today’s employment report helps shift what has become an increasingly negative narrative regarding the U.S. economy’s 2019 economic prospects,” said ABC Chief Economist Anirban Basu. “This past week has been focused on market volatility, growing trade deficits, and a weakening global economy. And though today’s headline number of 155,000 was a bit disappointing, it is consistent with the notion that the U.S. economy continues to expand, albeit at a plodding pace. That said, there is evidence of lingering strength in both industrial and service segments.
“Moreover, the somewhat softer employment growth registered during the past three months, which has averaged 170,000 net new jobs created per month, renders it more likely that the Federal Reserve will be able to slow the pace of monetary tightening in 2019,” said Basu. “Many observers have been concerned that aggressive tightening in 2019 could yield a downturn in 2020. That’s still possible, but softer job growth supplies the Federal Reserve with greater policy flexibility. There was also little evidence that wage growth accelerated last month. Average hourly earnings are up 3.1 percent over the past year, unchanged from October 2018.
“While it is true that nonresidential construction employment declined last month, the decline was minimal and may simply be attributable to wildfires in California and weather,” said Basu. “Most contractors continue to report healthy backlog and difficulty securing sufficient talent. This implies that industry job growth is likely during the months ahead on a seasonally adjusted basis. Contractors will want to look carefully at leading indicators during the coming months, as the economic forecast is admittedly shrouded in murkiness. Further market volatility, additional losses in executive confidence and slipping leading indicators could signal that 2020 could usher forth the next economic downturn, which for many construction firms would translate into weaker performance in 2021 and perhaps beyond.”