Nonresidential Construction Expands, Industry Unemployment Rate Plunges
WASHINGTON, D.C., May 6- The U.S. construction industry
added just 1,000 net new jobs in April according to an analysis of today’s U.S.
Bureau of Labor Statistics (BLS) release by Associated Builders and Contractors
(ABC). Although industrywide job growth was marginal, the nonresidential
construction sector added 6,600 net new jobs for the month. Revisions to the
previous two months of construction data produced a net decrease of 3,000 jobs,
with March’s construction employment estimate raised by 4,000 jobs but
February’s downgraded by 7,000 positions.
"There has been a significant volume of data indicating that residential construction has been slowing, including today’s report,” said ABC chief economist Anirban Basu. “This may be due in part to growing concerns in various parts of the nation that the multifamily rental market is on its way to being overbuilt.
“Since these are April data, one can no longer attribute results to meteorological forces,” said Basu. “There is a conventional notion that residential construction leads commercial construction. Nonresidential contractors have benefitted from the surge in multifamily residential construction in recent years because developers frequently incorporate retail or other commercial components into their projects. The slowing in residential construction may partially explain the recent softness in nonresidential construction spending. If that softness persists, the pace of nonresidential construction job growth will of course also slow.
“For now, increased spending on hotels, office buildings, data centers and warehouses related to e-commerce is helping support nonresidential job creation,” said Basu. “The bigger issue for contractors is not excess labor, but difficulty locating appropriately skilled labor. The construction industry’s unemployment rate is down to 6 percent. This represents the largest month-over-month decrease in the unemployment rate since April 2005. Firms are responding by offering more hours to current workers. The average workweek expanded by four-tenths of an hour in April to 39.1 hours per week, and average weekly earnings rose by nearly $14.”
"There has been a significant volume of data indicating that residential construction has been slowing, including today’s report,” said ABC chief economist Anirban Basu. “This may be due in part to growing concerns in various parts of the nation that the multifamily rental market is on its way to being overbuilt.
“Since these are April data, one can no longer attribute results to meteorological forces,” said Basu. “There is a conventional notion that residential construction leads commercial construction. Nonresidential contractors have benefitted from the surge in multifamily residential construction in recent years because developers frequently incorporate retail or other commercial components into their projects. The slowing in residential construction may partially explain the recent softness in nonresidential construction spending. If that softness persists, the pace of nonresidential construction job growth will of course also slow.
“For now, increased spending on hotels, office buildings, data centers and warehouses related to e-commerce is helping support nonresidential job creation,” said Basu. “The bigger issue for contractors is not excess labor, but difficulty locating appropriately skilled labor. The construction industry’s unemployment rate is down to 6 percent. This represents the largest month-over-month decrease in the unemployment rate since April 2005. Firms are responding by offering more hours to current workers. The average workweek expanded by four-tenths of an hour in April to 39.1 hours per week, and average weekly earnings rose by nearly $14.”
From ABC
Trenton H. Cotney
Florida Bar Certified Construction Lawyer
Trent Cotney, P.A.
407 N. Howard Avenue
Suite 100
Tampa, FL 33606
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