Construction employment surges to best month in 10 years


National construction employment surged in February, as the industry added 58,000 seasonally adjusted net new jobs, according to an analysis of U.S. Bureau of Labor Statistics data.

February’s data represents the best month for construction job creation since March 2007. Nonresidential construction added nearly two-thirds of net new construction jobs with 38,500 jobs added for the month.

In absolute terms, nonresidential construction employment growth was led by specialty trade contractors, which collectively added 21,500 net new jobs. The heavy and civil engineering category posted the largest percentage growth with employment growing 1.6 percent for the month.

Industry surveys indicate the typical construction firm expects to be busier in 2017 than they were last year, and government data continues to support that optimism. Over the first two months of 2017, construction has added 98,000 net new jobs; as many jobs were created over the first nine months of 2016.

Leading indicators, like the Architecture Billings Index, also have been upbeat, suggesting many contractors will encounter abundant bidding opportunities over the next several months. That likely has induced many construction firms to expand their staffing levels and to shore up their workforce.

As always, the numbers must be interpreted carefully. February’s weather was unusually mild, which likely translated into less interruption in employment than is typical. Usually, around 311,000 construction workers are sidelined due to weather in February. There was substantially less interruption this year.

Still, there is reason to believe construction job gains generated over the past two months are explained by more than unusually warm weather. Data suggest there now are more jobseekers looking to participate in the construction sector’s ongoing recovery. That has likely helped some construction firms fill openings more quickly over the past two months.

After rising recently, the construction industry unemployment rate fell 0.6 percentage points in February and now stands at 8.8 percent. The national unemployment rate inched down to 4.7 percent in February from 4.8 percent in the previous month. The labor force participation rose once again, this time to 63 percent, marking its third-highest rate over the past three years. It remains low by longer-term historical standards, however. That said, America’s labor market recovery appears to have gained a bit of steam over the past two months, with the employment-to-population ratio achieving its highest level in eight years.

Anirban Basu is chief economist with Associated Builders and Contractors.

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