Nonresidential Construction Hiring Up in May
PRESS RELEASES
WASHINGTON, June 6 — The U.S. construction industry added 4,000 jobs on net in May, according to the U.S. Bureau of Labor Statistics (BLS). On a year-over-year basis, industry employment has increased by 126,000 jobs, an increase of 1.5%.
Nonresidential construction employment increased by 11,300 positions, with growth in all three subcategories. Nonresidential specialty trade added the most jobs, increasing by 4,500 positions, while heavy and civil engineering and nonresidential building added 3,700 and 3,100 jobs, respectively.
The construction unemployment rate decreased to 3.5% in May. Unemployment across all industries remained unchanged at 4.2%.
“The nonresidential construction segment has now added jobs at over twice the pace of the broader economy during the past 12 months,” said Anirban Basu, chief economist for Associated Builders and Contractors (ABC). “This hiring has been aided by softness in the residential segment, which lost over 7,000 jobs in May, freeing up workers for nonresidential contractors. Even so, the industrywide unemployment rate fell to an exceptionally low 3.5% in May, indicating that the labor supply remains unusually tight."
Added Ken Simonson, chief economist for Associated General Contractors of America (AGC). “Constant changes in tariffs and other policies that are affecting the cost and demand for construction have led to a significant slowdown in hiring.”
Noted Basu, “Despite healthy nonresidential hiring, the broader industry has added just 25,000 jobs from January to May. That marks the slowest five-month employment growth since 2020 and provides a clear indication that high interest rates, tight lending standards and policy uncertainty are weighing on industrywide momentum."
Even so, ABC member contractors remain optimistic, according to ABC’s Construction Confidence Index. The latest measure still shows a majority of contractors expecting their staffing levels to increase over the next six months, said Basu.
Specifically, construction employment in May totaled 8,314,000, seasonally adjusted, an increase of 4,000 from April. Headcount rose by 126,000 jobs or 1.5% during the past 12 months, topping the 1.1% growth rate in total nonfarm payroll employment. However, the sector’s rate of growth was markedly slower than the 2.8% increase in construction employment recorded a year earlier.
Average hourly earnings for production and nonsupervisory employees in construction—including most onsite craft workers and many office staff—increased 4.7% over the year to $37.13. That gain exceeded the 4% rise in pay for such workers in the overall private sector.
The unemployment rate among workers with recent construction experience fell to 3.5% percent in May, down from 3.9% a year earlier. A separate BLS report released earlier this week showed the job openings rate in construction declined to 2.9% in April, the lowest April level since 2020. The hiring rate inched up to 4.2%, while the layoff rate rose slightly to 2.1%. The data suggest that contractors are holding onto existing workers even as they scale back on new hiring, Simonson noted.
AGC officials said the more federal officials can do to provide certainty about tariff rates, tax levels and federal spending priorities, the more developers are likely to proceed with stalled projects. They urged the administration to continue negotiating trade deals to eliminate tariff uncertainty, and for the Senate to pass the tax bill, noting that both would help ease investor and developer concerns.
“Construction firms continue to hire and boost wages, but the pace of growth has slowed as demand for certain types of projects cools,” said Jeffrey D. Shoaf, AGC’s chief executive officer. “As federal officials provide more certainty about tariffs, taxes and investment levels, demand for projects is likely to rebound.”
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