Construction employment added 39,000 jobs on net in March, according to Associated Builders and Contractors. On a year-over-year basis, the industry has expanded by 270,000 jobs—an increase of 3.4%.
The construction unemployment rate fell from 7% in February to 5.4% in March. The national unemployment rate for all industries decreased from 3.9% in February to 3.8% in March as the U.S. economy added 303,000 jobs.
Nonresidential construction added 24,600 jobs in March, with growth in all three subsectors. Nonresidential specialty trade contractors added 16,300 jobs; heavy and civil engineering added 6,000 jobs; and nonresidential building added 2,300 jobs.
“Today’s release was a blockbuster jobs report and indicates that recession is not arriving anytime soon,” said ABC Chief Economist Anirban Basu. “The 39,000 jobs added by the nation’s construction segment was roughly twice the monthly growth observed over the past year. If one focuses purely on nonresidential construction, monthly job growth was nearly 80% faster than the one-year average.
“Structural transformations in the economy, including replenished domestic supply chains, expanded data center demand and augmented infrastructure, are making it difficult for many project owners to wait for lower construction delivery costs,” Basu continued. “Despite the effects of worker shortages, still-elevated materials prices, newly emerging supply chain issues and the high cost of project financing, both privately and publicly financed segments produced substantial employment growth in March. This comports with ABC’s Construction Confidence Index, which shows that a large share of contractors intend to grow their staffing levels over the next six months.”
However, Basu said the report was not completely positive.
“Those in search of lower inflation and interest rates will not be comforted by this release,” Basu said. “While economywide year-over-year wage growth softened to 4.1% in March, the monthly wage growth figure suggested a pace of compensation growth that will render it difficult for the Federal Reserve to substantially reduce interest rates in 2024. The notion that interest rates will remain higher for longer remains firmly in place, which means that project financing costs will likely be an ongoing issue for construction demand, especially in privately financed segments, for the foreseeable future.”
