Construction job growth flattens in April

Construction workers wait in line to do a temperature test to return to the job site after lunch, amid the coronavirus disease (Covid-19) outbreak, in the Manhattan borough of New York City, New York, U.S., November 10, 2020. REUTERS/Carlo Allegri

The U.S. Bureau of Labor Statistics (BLS) has released its report on the country’s 2021 employment situation through April, and the state of the construction industry remains unchanged, though the industry’s employment numbers are still below the pre-Covid-19 pandemic levels of February 2020 by 196,000 jobs.

Associated Builders and Contractors (ABC) analyzed the BLS data and determined that over the past year, construction has added 917,000 jobs and recovered 82.4% of the jobs lost during the first months of the pandemic.

Specifically, nonresidential construction lost approximately 2,900 jobs overall in April after losing 11,800 specialty trade contractors, but those huge numbers were offset by gains in heavy and civil engineering (plus-6,300 jobs) and nonresidential building (plus-2,600).

“While many observers are shocked by [the] disappointing employment report, contractors and other employers have been signaling for weeks that all is not right in America’s labor market,” said ABC Chief Economist Anirban Basu. “In particular, a growing chorus of employers indicates difficulty filling available job openings. Demand for human capital is elevated in many industries, but a combination of stimulus payments, stepped-up unemployment insurance benefits, lingering fear of infection and remote schooling is slowing growth in labor force participation.”

According to ABC, construction’s unemployment rate improved from March’s 8.6% figure to 7.7% in April, and BLS reported the unemployment rate among all U.S. industries changed slightly to 6.1%.

Reuters reported that although construction payrolls were flat in April, other industries such as transportation and warehousing, employment for couriers and messengers fell by 77,000, with retail employment dropping by 15,300 jobs.

Basu said input shortages on products such as softwood lumber, steel, copper and semiconductors have caused materials costs to rise while slowing down the ramping of production; the economist said it’s not a coincidence that despite a higher demand for vehicles, employment in the motor vehicles and parts manufacturing segment declined by 27,000 jobs in April.

Still, Basu pointed to ABC’s Construction Confidence Index, which signals that typical contractor expects sales, staffing and margins to expand over the next six months.

Associated Builders and Contractors released this graph comparing construction employment data from April 2020, a month into the Covid-19 pandemic, to April 2021

“As vaccination rates increase and infection rates turn lower, accumulated household savings combined with more effective supply chains should translate into improving economic performance,” Basu said. “That in turn will help lift demand for construction services later this year and into 2022.”

Although construction is still 196,000 jobs below the pre-pandemic levels of February 2020, the industry had lost more than 1 million jobs April 2020, according to The New York Times.

ABC released data comparing April 2020 – a month after Covid-19 first hit the U.S. – to April 2021, which shows the industry’s employment has grown 14% over the year (see chart).

Construction’s 7.7% unemployment figure is definitely an improvement from the 10% rate the Associated General Contractors of America (AGC) reported in March 2021.