By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE
Construction employment – both nonresidential and residential – totaled 7.42 million as of July 31, an increase of 1.5 percent over June, but the lion’s share of that gain came from hiring in the residential sector.
AGC of America Chief Economist Ken Simonson said soaring materials costs, long or uncertain delivery times and hesitancy by nonresidential project owners to commit to construction are the factors contributing to a still-stalled pace of commercial construction across the U.S.
The numbers hail from an August 6 government data analysis by the AGC.
“Recovery has been especially slow in infrastructure construction,” Simonson said.
Construction employment in July represented a gain of 11,000 jobs following three months of job losses, according to Simonson, however the rebound was limited to residential and specialty trade contractors. Nonresidential building and infrastructure construction firms continued to lose workers.
Residential building contractors including single-family homebuilders added 8,399 employees in July, while employment was unchanged among residential specialty trade contractors. Simonson said the two residential segments have added a total of 58,500 employees, or 2.0 percent, to their workforce nationwide since February 2020.
In contrast, nonresidential building contractors shed 2,500 employees in July. Employment declined by 2,100 among heavy and civil engineering construction firms, the segment most connected with building and rehabbing infrastructure. Nonresidential specialty trade contractors added 7,500 employees last month.
Following the huge loss of jobs between February and April 2020 at the start of the pandemic, infrastructure-centric contractors have added back only 37 percent of lost jobs. According to the AGC analysis, nonresidential building and specialty trade contractors have each regained about 60 percent of lost workers, while the total nonfarm payroll economy has recouped 75 percent of workers.
“There are an unprecedented number of construction material price increases,” said Simonson. “The problems of these extreme price increases and long lead times for production or delivery to project sites mean fewer construction workers are being employed. Some owners are delaying project starts, adding to the drag on industry employment.”