Construction Employment Increases
Jobs Increase in Many States Despite Labor Shortages
by the Associated General Contractors of America
Construction employment increased in 226, or 63%, of 358 metro areas between October 2022 and October 2023, according to an analysis by the Associated General Contractors of America (AGC) of new government employment data. Association officials noted that tight labor market conditions kept construction employment from increasing in even more metro areas. Additionally, construction employment increased in 34 states and the District of Columbia in November from a year earlier, while 28 states added construction jobs from October to November. Association officials noted fewer states added construction jobs in November than other recent months, but contractors are mostly upbeat heading into 2024.
“Construction employment keeps growing in a solid majority of metro areas but many more would be in the plus-column if contractors could find qualified workers,” said Ken Simonson, the AGC’s Chief Economist. “With construction unemployment hovering around 4%, it’s clear there aren’t enough jobseekers available to fill all the openings.”
New York City, New York, added the most construction jobs with 14,600 jobs, at 10%, followed by Dallas-Plano-Irving, Texas with 11,000 jobs, at 7%, Baton Rouge, Louisiana, 9,400 jobs, 20%, Portland-Vancouver-Hillsboro, Oregon and Washington, 8,300 jobs, 10%, and Boston-Cambridge-Newton, Massachusetts, 7,800 jobs, 10%. The largest percentage gains were in Baton Rouge, Louisiana, followed by Lexington-Fayette, Kentucky with 13%, 1,800 jobs, Grand Rapids-Wyoming, Michigan, 13%, 3,700 jobs, Corvallis, Oregon, 13%, 200 jobs, and Toledo, Ohio, 12%, 1,700 jobs.
Construction employment declined over the year in 54 metros or 15% of all areas and was unchanged in 78 areas. The largest job loss occurred in Houston-The Woodlands-Sugar Land, Texas, -11,500 jobs, -5%, followed by Denver-Aurora-Lakewood, Colorado, -5,300 jobs, -5%, Orange-Rockland-Westchester, New York, -4,500 jobs, -9%, and Nassau County-Suffolk County, New York, -4,500 jobs, -5%. The largest percentage decrease occurred in Kankakee, Illinois, -13%, -200 jobs, followed by Bay City, Michigan, -12%, -200 jobs, Binghamton, New York, -11%, -500 jobs, Pittsfield, Massachusetts, -9%, -200 jobs, and Orange-Rockland-Westchester, New York.
“The number of states with construction job gains has been shrinking as apartment and office projects wind down,” said Simonson. “But contractors are optimistic about demand for infrastructure and federal projects in 2024, while homebuilding is starting to revive in many states.”
Between November 2022 and November 2023, 34 states and D.C. added construction jobs, while industry employment declined in 14 states and held steady in Alaska and West Virginia. Texas added the most construction employees over the year, 35,700 jobs or 4.5%, followed by California, 33,800 jobs, 3.7%, Florida, 13,700, 2.2%, Kentucky, 12,000 jobs, 14.5%, and Ohio, 10,500 jobs, 4.4%. Kentucky had the largest percentage increase over 12 months, followed by Arkansas, 12.0%, 7,000 jobs, South Dakota, 11.2%, 2,900 jobs, and Wyoming, 7.5%, 1,600 jobs.
New York lost the most construction jobs during the past 12 months, -6,300 jobs, -1.6%, followed by Missouri, -4,700 jobs, -3.4%, Washington, -4,600 jobs, -1.9%, and Colorado, -4,400 jobs, -2.4%. North Dakota had the largest percentage loss, -8.2%, -2,200 jobs, followed by Missouri, Hawaii, -2.6%, -1,000 jobs, and Vermont, -2.6%, -400 jobs.
For the month, construction employment increased in 28 states, declined in 19 states and D.C., and was unchanged in Alaska, Georgia, and Louisiana. Texas added the most jobs over the month, 9,200 jobs, 1.1%, followed by California, 6,500 jobs, 0.7%, Florida, 6,300 jobs, 1.0%, Arizona, 2,700 jobs, 1.3%, and Nevada, 2,700 jobs, 2.4%. The largest percentage gain occurred in Oklahoma, 2.7%, 2,300 jobs, followed by Nevada and Iowa, 2.2%, 1,800 jobs.
New York lost the most construction jobs in November, -5,200 jobs, -1.3%, followed by Ohio, -3,900 jobs, -1.5%, Michigan, -2,500 jobs, -1.3%, and New Jersey, -2,400 jobs, -1.5%. The largest percentage loss occurred in Ohio and New Jersey, followed by New York, Michigan, and Oregon, -1.3%, -1,700 jobs.
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 Simonson. “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% over the year to $34.96 per hour. Wage growth accelerated from 5.5% in October. Construction firms in November provided a wage “premium” of more than 19% 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%, which outpaced the 1.8% job growth in the overall economy. Residential building and specialty trade contractors added 1,000 employees in November and 53,000, 1.6%, 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%, since November 2022.
A report on job openings that the government released 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 AGC’s Chief Executive Officer. “Exposing more people to construction career opportunities will put more people to work and make it easier to build.”
Association officials pointed to the fact relatively few schools offer programs focused on construction as one reason not enough workers are seeking positions in the industry, despite the high wages available. They also pointed to the lack of temporary work visas available specifically for the construction industry. They urged Washington leaders to invest more in construction education and training programs and to explore opportunities to allow more people with construction skills to legally enter the country and work in the industry.
“Policy makers need to expose more students to construction career opportunities and accept new workers if they truly want new infrastructure, clean energy, and manufacturing facilities,” said Sandherr. “Instead, they aren’t interested in encouraging students to pursue construction careers or willing to offer a legal path for others to pursue those opportunities.”
“Too few new workers are ever exposed to construction as a career opportunity,” Sandherr continued. “Boosting funding for construction education and training will expose more students to career opportunities in construction.”
