February data from the Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics suggest that while construction hiring continues to add net jobs to the sector, the rate of this increase slowed at the beginning of the year.
For the economy as a whole, hiring rates remain near post-recession highs. The hiring rate in February increased to 3.3% after a six month-period of 3.2% monthly rates. However, disappointing payroll jobs data for March suggest that the March JOLTS data may show a decline in the hiring rate, perhaps due to weather-related factors.
The job openings rate (the red line below) continued on its post-Great Recession upward trend. It now stands at 2.6%. The upward trend in open positions bodes well for further job creation in 2012, which in turn should help support demand for both owner-occupied and rental housing.
For the construction sector, the hiring rate has slowed recently and is now at 5.6%, the lowest rate since 2010. Despite the decline in the rate, the nominal number of construction hires has actually held steady. February hiring for the construction sector stood at 310,000. This marks the 13th straight month of gross hires exceeding 300,000. The rate has fallen because the employment base – the total number of active positions – has grown in recent months.
As expected, the non-seasonally adjusted construction sector layoff data fell off seasonal yearly highs at the beginning of the year. Total layoffs for the sector numbered 213,000 and the layoffs rate fell to 4.2%. However, large upward revisions to January layoffs data left 2012 net hires for the construction sector at only 11,000 positions.
As a result, few net jobs have been added to the residential construction sector since moving off post-recession lows. At the lowest level of home building employment (builders plus trades contractors), set in December 2010, total job losses from the peak (April 2006) equaled 1.46 million.
Total employment in the home building sector now stands at 2.03 million (569,000 builders and 1.47 million in associated trades), which places total net jobs losses since the peak at 1.42 million.
It is useful to keep in mind that this accounting is just of direct employment connected to home building. An indirect accounting would also includes job losses in businesses associated with home building and remodeling, such as retail, finance, and furniture manufacturing.