Construction employment increased by 158,000 jobs in June, according to www.abc.org. During the past two months, the industry has added 591,000 jobs, recovering 56% of the industrywide jobs lost since the start of the COVID-19 pandemic.
The construction unemployment rate fell from 12.7% in May to 10.1% in June—an increase of 6.1 percentage points compared with the same time last year but a decrease of 2.6 percentage points compared with May. The national unemployment rate for all industries fell from 13.3% in May to 11.1% in June as the U.S. economy added 4.8 million jobs.
Nonresidential construction employment added 74,700 jobs on net in June, and there were job gains in two of the three nonresidential segments.
“Since the pandemic devastated the economy, most economists have been predicting a V-shaped recovery,” said Associated Builders and Contractors Chief Economist Anirban Basu. “To date, this has proven correct. While recovery is likely to become more erratic during the months ahead due to a number of factors, including the reemergence of rapid COVID-19 spread, recent employment, unemployment, residential building permits and retail sales data all highlight the potential of the U.S. economy to experience a rapid rebound in economic activity as 2021 approaches. ABC’s Construction Backlog Indicator rose to 7.9 months in May, an increase of less than 0.1 months from April’s reading, and its Construction Confidence Indicator continued to rebound from the historically low levels observed in the March survey.”
Still, Basu warns a rapid rebound for the U.S. economy may not mean the same is expected for the construction industry.
“However, even if the broader U.S. economy continues to rebound in 2020, construction is less likely to experience a smooth recovery,” Basu said. “The recession, while brief, wreaked havoc on the economic fundamentals of a number of key segments of the construction market, including office, retail and hotel construction. Moreover, state and local government finances have become increasingly fragile, putting both operational and capital spending at risk.
“After this initial period of recovery in U.S. nonresidential construction, there are likely to be periods of slower growth or even contraction,” Basu continued. “Nonresidential construction activity tends to lag the broader economy by 12-18 months, and this suggests that there will be some shaky industry performance in 2021 and perhaps beyond.”
