Record October Job Openings Indicate Contractors are Struggling to Attract and Retain Skilled Workers amid Tight Overall Labor Market; Association Officials Call for Investments in Construction Education
Construction sector job gains slowed in November as firms added only 2,000 jobs, but wages for hourly employees accelerated and the number of unfilled positions reached record highs in October, the Associated General Contractors of America reported in analyzing government data released today. Association officials said the new figures indicate the slowdown in hiring is likely because of workforce shortages instead of declining need for labor.
“The steep rise in pay for craft and other hourly workers, along with an earlier report of record job openings heading into November, indicate that contractors are still struggling to find enough skilled workers,” said Ken Simonson, the association’s chief economist. “The slowdown in employment is a sign of how tight the job market is, not an indication that construction demand is lagging.”
Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—climbed by 5.9 percent over the year to $34.96 per hour. Wage growth accelerated from 5.5 percent in October. Construction firms in November provided a wage “premium” of more than 19 percent compared to the average hourly earnings for all private-sector production employees.
Construction employment in November totaled 8,033,000, seasonally adjusted, an increase of 2,000 from October. The sector has added 200,000 jobs during the past 12 months. That was a gain of 2.6 percent, which outpaced the 1.8 percent job growth in the overall economy. Residential building and specialty trade contractors added 1,000 employees in November and 53,000 (1.6 percent) over 12 months. Employment at nonresidential construction firms—nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—climbed by 1,400 positions for the month and 147,800 (3.2 percent) since November 2022.
A report on job openings that the government released on Tuesday showed there were 457,000 openings in construction at the end of October, the highest October total in the 23-year history of the series. Simonson said this was a strong sign that contractors remain eager to hire and that the dip in employment gains in November is more likely a sign of the dearth of qualified workers rather than a slowdown in demand for projects.
Association officials said labor shortages were holding back growth for the construction industry and broader economy by limiting the number of new, high-paying construction jobs being created. They urged federal, state and local policy makers to boost investments in construction education and training programs to expose more people to career opportunities in the sector. They also called on federal officials to allow more people to legally enter the country to work in the industry as short-term relief until more domestic workers are available.
“Construction workforce shortages are a problem not just for contractors, but the broader economy because they limit job growth and make it harder to build infrastructure and economic development projects” said Stephen E. Sandherr, the association’s chief executive officer. “Exposing more people to construction career opportunities will put more people to work and make it easier to build.”
View the construction employment data.