Nonresidential Hiring Up, Despite Slowed Spending
Key Highlights
- The construction industry added 9,000 jobs in April, with nonresidential sectors leading the growth;
- Nonresidential construction employment increased by 19,000, driven by specialty trades and data center projects;
- Despite a 0.2% decrease in nonresidential spending, industry confidence remains elevated, due to data center backlog;
- The construction unemployment rate stood at 3.8%, indicating a tight labor market.
WASHINGTON, May 8—The construction industry added 9,000 jobs on net in April, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has expanded by 50,000 jobs, an increase of 0.6%.
Nonresidential construction employment increased by 19,000 positions, with gains in all three subcategories. Nonresidential specialty traded added the most jobs, increasing by 12,600 positions. Nonresidential building and heavy and civil engineering added 5,600 and 800 jobs, respectively, in April.
The construction unemployment rate was 3.8% in April. Unemployment across all industries remained unchanged at 4.3% and is 0.1 percentage point higher than it was a year ago.
“Construction employment expanded modestly in April, but that’s largely due to weakness on the residential side of the industry,” said ABC Chief Economist Anirban Basu. “Nonresidential construction employment rose at a healthy pace for the month and is up a respectable 2.0% over the past year. This strength can be traced to surging data center construction spending, which is up 34% over the past year. It also helps explain why ABC member expectations for hiring remain elevated, according to ABC’s Construction Confidence Index, despite tepid industrywide job growth.”
Nonresidential construction spending down again
Meanwhile, national nonresidential construction spending decreased 0.2% in March, according to U.S. Census Bureau data released May 7. On a seasonally adjusted annualized basis, nonresidential spending totaled $1.244 trillion.
Spending was down on a monthly basis in 9 of the 16 nonresidential subcategories. Both public and private nonresidential spending were down 0.2% in March.
“Nonresidential construction spending contracted yet again in March,” noted Basu. “While a large portion of the ongoing decline is due to steadily falling manufacturing-related construction activity, weakness is becoming more widespread. Both public and private sector activity fell in March, and the latter is now down more than 2% on a year-over-year basis. With the exception of the ongoing boom in data center construction (+34.3% year over year), there are few sources of momentum. Despite this ongoing weakness, however, contractors remain optimistic about the outlook, according to ABC’s Construction Confidence Index.”