Following a decrease of 975,000 jobs in April, construction employment increased by 464,000 jobs in May—the largest monthly increase on record for the construction industry, according to www.abc.org.
The construction unemployment rate fell from 16.6% in April to 12.7% in May—an increase of 9.5 percentage points compared with the same time last year but a decrease of 3.9 percentage points compared with April. The national unemployment rate for all industries fell from 14.7% in April to 13.3% in May.
Although nonresidential construction employment lost more than 570,000 jobs on net in April, 237,000 net new jobs were added in May, with job gains in all three nonresidential subsegments. May 2020 nonresidential employment was 286,000 jobs lower compared with May 2019.
“One way to look at this stunning jobs report is to suggest that economists missed the mark by approximately 10.5 million jobs,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Economists polled by Dow Jones had forecasted a decline exceeding 8 million jobs. Instead, the economy added a bit more than 2.5 million jobs. It’s also possible that economists missed the mark by two to four weeks, as the economy opened up faster than most economists expected and consumers have been far more willing to engage the economy than many thought possible given the ongoing personal and public health risks presented by COVID-19.
“For contractors, this is purely good news,” Basu continued. “With the economy beginning its recovery sooner and more dramatically than anticipated, fewer projects are likely to be postponed or canceled. Combined with rising contractor confidence, as indicated by ABC’s Construction Confidence Index, this will also help accelerate the recovery of state and local government finances as tax collections surge, ultimately resulting in more monies available to finance infrastructure. That said, state and local government finances remain in tough shape, with many local government workers losing jobs in May."
Basu cautioned there still are challenges ahead.
“Make no mistake—these remain treacherous times,” Basu said. “Though economic recovery may have begun, there is still the possibility of a resurgence in infections as stores, restaurants and other businesses reopen. Moreover, while unemployment dipped to 13.3% in May, it remains elevated. Labor force participation has been rocked in recent months, and it may be the case that many dislocated workers, including construction workers, will remain out of the labor force for an indefinite period. There is also a presidential election later this year, which will create further uncertainty for economic decision makers, including among those who purchase construction services.”
