Construction employment added jobs in July

Construction employment added 25,000 jobs on net in July, according to Associated Builders and Contractors. On a year-over-year basis, the industry has expanded by 239,000 jobs—an increase of 3%.

The construction unemployment rate rose from 3.3% in June to 3.9% in July. The national unemployment rate for all industries increased from 4.1% in June to 4.3% in July as the U.S. economy added 114,000 jobs.

Nonresidential construction added 16,200 jobs in July, with growth in all three subsectors. Nonresidential specialty trade contractors added 11,300 jobs; heavy and civil engineering added 2,900 jobs; and nonresidential building added 2,000 jobs.

“It appears that America is headed into recession,” said ABC Chief Economist Anirban Basu. “While it is true that many economists have been suggesting this for more than two years, the recent slowing in economic activity feels different. Unemployment is climbing rapidly. Consumer spending growth has become more sluggish. U.S. equity markets are generating large losses, an indication that America is caught in a growth scare and that there is a growing consensus that the Federal Reserve has waited too long to begin reducing interest rates.

“Given that macroeconomic backdrop, it may seem peculiar that the U.S. construction industry managed to add 25,000 jobs in July,” Basu continued. “How can one suggest that the U.S. economy is heading into recession when contractors are still eagerly hiring workers? In this regard, history is instructive. Nonresidential construction industry performance has tended to lag the performance of the overall economy by 12 to 18 months. According to ABC’s Construction Confidence Index, contractors collectively remain upbeat regarding their prospects for the next six months. But if the economy continues to weaken, and it appears poised to do precisely that, contractor confidence will begin to ebb. Indeed, the June construction spending data released on Aug. 1 indicate that many construction segments are already in slowdown mode.”

Basu said construction related to manufacturing is an exception.

“The fastest segment of growth in construction spending has been in building construction, which encompasses massive investments in chip-making facilities and other industrial projects,” Basu said. “Much of that is fueled in part by federal subsidies. But many construction segments do not benefit from federal subsidies, and those are the sectors that stand to experience the most erosion in performance as the economy softens and elevated borrowing costs linger.”

Date : Jan. 01, 0001