Jobs Graph 1 7 22 61db9f08cbfe1

Construction Added 22,000 Jobs in December

Jan. 9, 2022
Industry jobless rate at 5% as ongoing nonresidential recovery offset a rare dip in residential work. AGC, ABC optimistic as new year begins.


WASHINGTON DC, January 7, 2022 -- Construction employment increased by 22,000 jobs between November and December as nonresidential construction firms added workers for the fourth month in a row while residential construction employment slipped, according to new Bureau of Labor Statistics data released today.

Analysis by the Associated General Contractors of America (AGC) noted that the new employment figures are consistent with the results of a new outlook survey they will be releasing on January 12. “Nonresidential contractors are increasingly busy and are eager to hire even more workers,” said AGC Chief Economist Ken Simonson. “But the low rate of unemployment and record job openings in construction show how difficult it is bringing enough workers on board.”

Simonson noted that the unemployment rate among former construction workers in December was 5%, which tied the lowest December rate since at least 2000 and was down from 9.6% a year ago. He added that industry job openings totaled 345,000 at the end of November, an all-time high for November data.                 

Construction employment in December totaled 7,560,000, an increase of 22,000 for the month and 160,000 or 2.2% for the year. However, industry employment still trails the pre-pandemic peak, set in February 2020, by 88,000 positions.

Nonresidential construction firms added 27,000 employees in December, following a pickup of 25,700 in November. The category comprises nonresidential building contractors, with a gain of 3,700 employees; specialty trade contractors, with 12,900 more workers than in November; and heavy and civil engineering construction, which added 10,400 employees. But nonresidential employment remains 169,000 below the February 2020 level. The sector has regained only 74% of the jobs lost at the outset of the pandemic.

Residential construction employment dipped for only the third time in 2021, by 4,100 employees in December. Residential building contractors, such as homebuilders and general contractors that concentrate on multifamily construction, added 700 workers during the month, while residential specialty trade contractors shed 4,800 employees. Residential employment in December remained 82,000 above the February 2020 mark.

“The labor market remains extremely tight going into 2022, (so) contractors will be competing fiercely for talent," said Anirban Basu, chief economist for Associated Builders & Contractrors (ABC). "They already have been, according to ABC’s Construction Confidence Indicator, but that competition will become even more intense as dollars from the infrastructure package flow into the economy. Accordingly, contractors should expect another year of rapid wage increases in 2022. Those rising costs, along with others, must be included in bids if margins are to be sustained.”

For their part, AGC officials said the jobs figures reflect the industry optimism indicated in the annual Outlook survey they will be releasing during a virtual media briefing on Wednesday, Jan. 12. But they cautioned that labor shortages continue to challenge contractors who are struggling to hire enough workers to keep pace with demand.

“The industry appears well poised for a strong recovery in 2022, but there are certainly clear challenges, including labor shortages, that could undermine construction this year,” said Stephen E. Sandherr, AGC’s chief executive officer.

Construction spending up in November

On Jan. 3, prior to the latest jobs report, the Census Bureau also released its latest data on total U.S. construction spending for November. Overall, levels increased both from October and from a year earlier, as gains in private residential and nonresidential projects outweighed decreases in public outlays, according to AGC's analysis of the numbers. Officials noted that public sector investments were down in part because Congress so far has failed to provide funding for the new Bipartisan Infrastructure bill enacted last year.

“Private nonresidential spending appears to be on a solid upswing, with five consecutive months of growth, but public outlays for construction remain erratic,” added Simonson. “The public side isn’t likely to post steady gains until funds from the new infrastructure law become available and turn into actual projects.”

Construction spending in November totaled $1.63 trillion at a seasonally adjusted annual rate, 0.4% above the October rate and 9.3% higher than in November 2020. Year-to-date spending in the first 11 months of 2021 combined increased 7.9% from the total for January-November 2020.