Building employment falls practically 7% yr over yr

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Diving letter:

  • Construction employment fell by 61,000 in February, while the sector’s unemployment rate rose to 9.6% amid severe winter weather and persistent weakness in new non-residential projects. This comes from an analysis of government data released on Friday by the Associated General Contractors of America.
  • Job losses were concentrated in non-residential construction, with a decrease of 60,800 jobs in February after a decrease of 400 jobs in January. The total in February 2021 was 316,000 jobs, or 6.8% fewer than a year earlier.
  • “The sharp decline in construction employment in February continues a downward trend in non-residential activities that began before the disruption caused by freezes and blackouts last month,” said Ken Simonson, chief economist for the association. “Despite the recovery in some parts of the economy, private non-residential construction still has many canceled and postponed projects and few fresh starts.”

Dive Insight:

Despite the massive decline, Associated Builders and Contractors’ chief economist Anirban Basu said the numbers are not a cause for concern among commercial contractors as weather-related disruptions in the south likely resulted in temporary job losses.

In the past few months, contractors have become more optimistic about the industry outlook, it shows ABCs construction residue indicatorCiting the growing backlog and expectations for increasing employment, sales and profit margins, Basu said in a statement.

“The equilibrium of the economy appears to be exceeding expectations for the labor market recovery, and there is growing evidence that more pervasive vaccinations are starting to affect economic results,” he said.

Another analysis was published last week found construction workers becoming harder to find and more expensive, despite coronavirus layoffs, according to a new report.

According to the Marcum JOLTS 2020 analysis, the industry is starting with a labor shortage as it recovers from last year’s pandemic-induced downturn. Job vacancies fell to 195,000 in December, which is around 2.6% of the vacant construction positions.

With contractors struggling to find workers in some regions, wages have soared to record levels. In January 2021, the average hourly wage for construction workers reached its highest ever level of $ 32.11, and the average weekly working time rose to its highest level since the third quarter of 2019.

“When the pandemic started, some thought (and hoped) that the massive job losses seen in March and April would alleviate the skills shortage that has frustrated construction companies for years,” wrote Basu, author of the report and chief construction economist for Marcum. “It just didn’t happen to any significant extent.”