Employment Report Shows Job Growth in All Significant Construction Sectors
According to the March 9 employment report by the Department of Labor, the construction industry added 48,000 jobs in February—the largest monthly increase since March 2007. The added jobs brought the unemployment rate to 15.7 percent in February, down from 16.1 percent the previous month and down from 17.1 percent one year ago. Compared to last year, the industry is up 140,000 jobs, or 2.5 percent. In addition, the nonresidential building sector added 6,200 jobs for the month and 20,600 jobs for the year.
Across all industries, the nation added 236,000 jobs as the private sector expanded by 246,000 jobs and the public sector shrank by 10,000 jobs, which is nearly 50 percent more jobs gained 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.
“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 ABC Chief Economist Anirban Basu. “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.”
For the nonresidential construction industry, specialty trade contractors grew by 23,000 jobs, or 1.1 percent, for the year and added 14,600 jobs last month. In the residential specialty trade contractors segment, 17,100 jobs were gained in February and 63,800 jobs, or 4.3 percent, were gained year over year. Overall residential building construction added 2,300 jobs in February, for a year-over-year increase of only 400 jobs, or 0.1 percent.
“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,” Basu noted.
In addition, heavy and civil engineering construction employment was up 3.7 percent, or 32,100 for the year and 8,200 jobs in February. Heavy and civil engineering is often thought to be a leading indicator for the overall nonresidential construction sector and, coupled with other residential and nonresidential indicators and the broader economy’s gathering momentum, Basu believes there is reason to expect further construction job growth.
“This is not to suggest that the economy is completely out of the woods,” Basu said. “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.”