Marcum LLP released its annual analysis of job trends in the construction industry, based on the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS). The 2017 Marcum JOLTS Report, published by the national accounting firm’s Construction Services Group, found significant growth in construction jobs last year, a trend that continued strongly into the first two months of 2018. Marcum also found that construction unemployment climbed in tandem, as job seekers returned to the construction market after years of flat to negative industry growth.
According to the report, 2017 ended with a gain of 250,000 construction jobs, for a total of 7.05 million, up from 6.8 million in December 2016. Job growth was steady throughout 2017, and this trend has continued into the New Year with 40,000 net new jobs added in January, followed by 61,000 net new jobs in February.
“Given strong backlog and elevated architectural billings, construction has predictably emerged as a major source of job creation in America… No major industry was more prolific than construction in terms of creating jobs in February,” said Anirban Basu, Marcum’s chief construction economist and author of the study.
At the same time, the construction unemployment rate ballooned from 4.5 percent in October 2017 to 7.8 percent in February 2018. Mr. Basu attributes the increase both to seasonality and to renewed confidence in the construction industry. “Many people left the industry in 2008, 2009, and 2010 as construction swooned. Some retired. Others left for jobs in retail, energy, or distribution. The data are consistent with the notion that some of these workers are returning to construction,” he wrote.
Unfilled job openings in the industry have remained steady at 200,000 since the end of 2016, reflecting severe shortages of skilled labor. Accordingly, net hires (hires minus job separations) continued to slow in 2017, hovering at an average of 15,000 in December.
“With skilled construction workers remaining scare, it makes sense that the pace of construction industry separations remains low. In other words, construction firms are holding onto their workers,” Mr. Basu wrote.
Looking ahead, he predicts that the combination of capital availability and confidence in the economy should fuel significant numbers of construction starts in 2018, with the demand for skilled construction workers continuing to be elevated. “The hope is that more workers return to the industry and that others postpone retirement in order to participate in the best period for construction since prior to the Great Recession,” Mr. Basu said.
He foresees higher steel and aluminum prices, resulting from inflation triggered by new tariffs on imports of these commodities. The inflated cost of construction materials and products such as vehicles should be expected, and faster increases in interest rates could bring the current economic expansion – and the rebounding construction industry — to a halt.
For the complete 2017 Marcum JOLTS report, visit www.marcumllp.com/construction.