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Residential and Nonresidential Construction Sectors Add Jobs, But Worker Shortages Are Likely to Expand as Industry Continues to Add Jobs during the Coming Months, Economist Warns

Construction firms added 45,000 jobs in April and 280,000 over 12 months, as the sector's unemployment rate fell to a nine-year April low of 7.5 percent, according to an analysis by the Associated General Contractors of America. Association officials noted that even as the industry continues to expand, growth has been erratic and inconsistent.

“Construction employment resumed strong growth in April after slipping in March and is now growing at more than double the growth rate for total nonfarm employment,” said Ken Simonson, the association's chief economist. “Nevertheless, job growth remains spotty with the nonresidential building sector losing jobs even as other construction sectors expanded.”

Construction employment totaled 6,384,000 in April, compared to 6,338,000 in March and 6,103,000 in April 2014, Simonson noted.  Residential building and specialty trade contractors added 23,600 jobs (1 percent) since March and 153,300 jobs (6.7 percent) over 12 months.  Within the residential sector residential building contractors added only 2800 jobs for the month while residential specialty trade contractors added 20,800 jobs compared to March.

Nonresidential contractors—building, specialty trade, and heavy and civil engineering construction firms—hired a net of 20,800 workers for the month and 126,100 (3.3 percent) since April 2014.  As with the residential sector, the nonresidential employment sector varied by segment.  Nonresidential specialty trade contractors added 20,200 jobs for the month while heavy and civil engineering contractors—who typically perform public-sector projects like highway construction—added 8,400 jobs since March.  But nonresidential building construction employment declined by 7,800 for the month and is up only 16,600 (2.4 percent) for the year.

Simonson added that the number of unemployed construction workers, 652,000, is at the lowest level since 2001.  The construction economist cautioned that reports of construction worker shortages are likely to grow over the coming months. “With construction employment likely to continue to expand for the foreseeable future, labor conditions are likely to get even tighter.”

Association officials urged Congress and the Obama administration to act on the series of measures the group outlined in its Workforce Development Plan.  Those measures are designed to make it easier for construction firms, local not-for-profits and school systems to establish construction training and education programs.

“The last time the sector’s unemployment level was this low construction firms were scrambling to find enough workers,” said Stephen E. Sandherr, the association’s chief executive officer. “While the labor situation isn’t as dire as it was back in 2006, Washington must act soon before more firms struggle to find enough workers to meet demand.”