Construction Wages Increase as Employers Struggle to Fill Key Positions

(AGC) — Construction employment increased by 8,000 jobs in September to the highest level since October 2008, amid a tight labor market that may be keeping contractors from hiring as many workers as they need, according to an analysis of new government data by the Associated General Contractors of America. Association officials said construction employment gains would have been higher if more high school students were exposed to construction as a possible career option.

“Construction firms added employees over the past year at a much higher rate than the public and private sectors as a whole, and contractors have been boosting pay to attract more workers,” said Ken Simonson, the association’s chief economist. “But with unemployment so low overall and in construction, many contractors are having trouble filling a variety of hourly craft and salaried openings.”

Construction employment totaled 6,911,000 in September, a gain of 8,000 for the month and 184,000, or 2.7 percent, over 12 months. The economist pointed out that the year-over-year growth rate in industry jobs was more than double the 1.2 percent rise in total nonfarm payroll employment. He cautioned that employment figures for both the construction industry and the total were likely distorted in September by temporary impacts from Hurricanes Harvey and Irma.

Residential construction—comprising residential building and specialty trade contractors—shed 7,200 jobs in September but added 80,600 jobs, or 3.1 percent, over the past 12 months. Nonresidential construction (building, specialty trades, and heavy and civil engineering construction) employment increased by 11,700 jobs in September and 103,300 positions, or 2.5 percent, over 12 months.

The construction sector’s 4.7 percent unemployment rate and the number of unemployed former construction workers in September, 433,000, were the lowest September figures since 2000. Similarly, the overall unemployment rate and number were the lowest for September since 2000, Simonson noted.

Average hourly earnings in the industry climbed to $29.19, an increase of 3.0 percent from a year earlier.  The economist noted that construction pays nearly 10 percent more per hour than the average nonfarm private-sector job in the United States, which pays an average of $26.55 per hour.

Construction officials noted that most firms reported, in a survey released in late August, that they were having a hard time finding enough qualified craft workers to hire. They added that if more young adults were exposed to high-paying jobs in construction as a possible career option, there would likely be more qualified applicants seeking jobs in the field. They urged Senators to vote on House-passed legislation, known as the Perkins Act, that will boost funding and flexibility for career and technical education programs.

“There are a lot of under-employed Americans who would be much better off working in construction, instead of doing shift work for little more than minimum wage,” said Stephen E. Sandherr, the association’s chief executive officer. “It is time to stop stigmatizing jobs like construction just because they require workers to use their hands as well as their brains.”


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