Number of Open Construction Jobs Hits Five-Year High

New government employment data indicate that the June count of construction sector job openings was the highest total since May 2008. While the increase in unfilled positions is consistent with the uptick in construction sector activity, particularly for home building, the data reflect only modest increases in total employment thus far. The rising count of open positions is thus consistent with reports of local labor shortages.

For the construction sector, Job Openings and Labor Turnover Survey (JOLTS) data from the Bureau of Labor Statistics (BLS) indicate that gross hiring declined, falling from 317,000 to 300,00 from May to June. The hiring rate, as measured on a 3-month moving average basis, continued to slow, falling to 5.2% in June.

constr labor mkt

Consistent with reports of some labor shortages for builders, the number of open, unfilled positions in the construction industry reached a five-year high in June. The number of unfilled positions in the sector climbed to 133,000 from 102,000 in May. This marks five of the last six months for which the total number of open positions was greater than 100,000. This is the first time this has occurred since 2008. Successfully filling open positions with qualified workers is a top concern for home builders in 2013.

The June job openings rate (open positions measured as a percentage of current employment) for construction was 2.2%. Measured as a three-month moving average, the openings rate (the blue line above) has staged a noticeable rise since September 2012. Combined with a declining sector layoff rate (non-seasonally adjusted), charted as a 12-month moving average in the graph above, these factors suggest more net construction hiring in the months ahead – if firms can find workers with the right skills.

Monthly employment data for July 2013 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that total employment in home building stands at 2.137 million, broken down as 584,000 builders and 1.553 million residential specialty trade contractors.

builder employment

According to the BLS data, over the last 12 months, the home building sector has added 89,000 jobs. Since the point of peak decline of home building employment, when total job losses for the industry stood at 1.466 million, 153,000 positions have been added to the residential construction sector.

While employment growth for the sector is not expected to occur at rates seen for the growth in overall building activity, the current level of improvement for total employment remains a puzzle. This small amount of job creation could be due to increased hours for existing workers, but if true, this is not a sustainable situation. Expected increases in building should lead to further growth in residential construction employment over the course of the year. Thus far in 2013, home building employment is averaging monthly growth of about 9,000 positions.

For the economy as a whole, the June JOLTS data indicate that the hiring rate fell slightly to 3.1% of total employment. The hiring rate has been in the 3.1% to 3.4% range since January 2011. The job openings rate was unchanged at 2.8% in June.

labor mkt

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0 replies

  1. Even small, specialty trade contractors like us at CraftPro Home Improvements ( feel the labor shortage. It’s been the #1 obstacle to expansion and growth for me. Thanks for a timely, informational article.

  2. We also have seen an improvement in the construction industry in the UK since the large recession hit in 2008 which virtually wiped out us as contractors and we are only now seeing growth again.
    I have blogged about the situation in the UK and found some interesting solutions to the problems of contractors being out of work.


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