Good News for Construction Workers as Jobs in Construction Increase
Construction workers have reason to celebrate as job opportunities in the industry continue to rise. According to the Labor Department, jobs in construction grew by 23,000 in June, with an additional 800 jobs added in residential construction. On average, construction jobs have been steadily increasing by 15,000 per month over the last year.
“The construction market is red hot,” said Richard Branch, chief economist of Dodge Construction Network. “Just another sign that we’re past the trough here…and better days are on their way.”
The recent hiring spree also reflects the rebound in the new home market, which has boosted builders’ confidence to push through projects. Moreover, it reveals a trend of homeowners choosing to upgrade their properties rather than selling.
June’s report demonstrates an 11% increase in jobs for residential buildings compared to pre-pandemic levels. Employment for nonresidential buildings also saw a modest 1.8% increase. Both sectors experienced monthly gains, supporting previous data indicating growth in single- and multi-family residential starts, permits, and new home sales.
“The construction industry is very interest-rate sensitive, so many expected job growth to crater,” explained Odeta Kushi, deputy chief economist at First American. “Yet new construction has been supported by the lack of existing-home inventory.”
In May, the National Association of Realtors reported the lowest inventory count for the month, further exacerbating the inventory woes. The scarcity of homes, combined with high mortgage rates, has posed challenges for younger adults aspiring to achieve homeownership.
To capitalize on their low mortgage rates, homeowners have been reluctant to sell. Instead, many are choosing to retrofit their current residences. The jobs data supports this phenomenon, as residential trade contractors—specializing in skilled tasks such as concrete pouring, plumbing, painting, and electrical work—added 10,000 jobs.
“With existing homeowners rate-locked into their home and with not enough homes on the market, consumers may decide to renovate their own home instead of trading up with a new home purchase,” Kushi added. “And you need more hammers at work to renovate homes.”
However, attracting more workers to meet the increasing demand remains a challenge. Job openings for construction reached 366,000 in May, according to JOLTS, marking a significant increase from the previous month. Monthly hires also climbed, drawing in 22,000 more workers, indicating a slight improvement in the hiring process.
Despite these positive developments, the construction labor market still faces tightness, as illustrated by a significant rise in quits among construction workers. Layoffs, on the other hand, have decreased, signaling a surge in new construction demand.
“The lack of labor in the construction sector, in particular, is hurting the ability of small builders to attract labor,” Branch explained. “We still see construction material prices rising. That’s also impacting margins in the construction industry and makes especially affordable single-family construction more difficult.”
Overall, construction workers can look forward to continued growth in the industry, with opportunities for employment and renovation projects on the rise.
– Dani Romero, Yahoo Finance
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