Construction Employment, Spending Up, Strong Indicators of a 2015 Boom

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Construction employment expanded in 228 metro areas in the US, declined in 64 and was stagnant in 47 between October 2013 and October 2014, according to a new analysis of federal employment data released recently by the Associated General Contractors of America.

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New federal figures show year-over-year growth in construction spending and many firms report impacts from growing shortages of qualified workers.

“Even as a number of markets continue to struggle with declining construction demand and employment, most metro areas are adding construction jobs as the industry slowly recovers,” said Ken Simonson, chief economist for the association. “As spending on construction continues to climb, more and more firms will struggle with the impacts of a labor market that is not keeping pace with demand.”

US employers added the largest number of workers in nearly 3 years in November and wage gains picked up, a sign of economic strength that could draw the Federal Reserve closer to raising interest rates.

Nonfarm payrolls surged by 321,000, the most since January 2012. Although the overall unemployment remained at 5.8%, the expansion in construction jobs was welcome news for a construction sector whose growth had been hampered for much of the year by a shortage of skilled labor. Construction spending rose the most since May, 1.1%, in October and September’s construction outlays were revised up to show only a 0.1% drop instead of the previously reported 0.4% fall.

Construction employment was up 20,000 reaching a total of 6,109,000 in November, according to the AGC analysis. This is the highest total since April 2009, a 12-month gain of 213,000 jobs or 3.6%. Increased spending and hiring could mean a robust year for construction in 2015 as many economists are revising forecasts for GDP growth upward.

Most telling is the fact is that the US Census Bureau numbers show residential building and specialty trade contractors added a combined 16,700 employees since October and 122,800 (5.6%) over 12 months. Credit markets loosening up and rising home sales have led to a strong residential market. Nonresidential contractors hired a net of 3,600 workers for the month and 90,100 (2.4%) since November 2013. However, the heavy and civil engineering construction segment, which includes most forms of public works construction, was the real laggard losing 1,300 jobs in November. Nonresidential building construction  lost 2,400 jobs.

Comments (2)

  1. The American people need to begin their transition from being an employee to becoming self-employed/entrepreneur. Job losses due to outsourcing and globalization will continue and the invasion of robots and machines (automation) has begun to further destroy jobs.

  2. Taras Berezowsky says:

    Definitely the “end-of-days,” scenario there, Thomas…

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