The number of open, unfilled construction sector jobs posted a small increase in June, as the count of job gains in the residential construction sector passed the 300,000 mark since cycle lows.
According to the BLS Job Openings and Labor Turnover Survey (JOLTS), the number of open construction sector jobs increased on a seasonally adjusted basis from a downwardly revised 125,000 in May to 127,000 in June. The June count of unfilled construction jobs is tied for the fourth highest monthly tally since the end of the Great Recession.
On a three-month moving average basis, the open position rate for the construction sector increased to 1.87% for the month of June. While the open rate has declined in recent months, the present rate of open jobs in construction remains above any rate witnessed after the recession and prior to 2013.
Monthly gross hiring in construction dipped in June, falling on a seasonally adjusted basis from 301,000 in May to 264,000. Over the same period, the hiring rate, as measured on a 3-month moving average basis, effectively held steady at 4.73%.
Two trends in the construction sector are worth noting. First, the layoff rate for the sector (graphed above as a 12-month moving average) has continued to decrease. Second, the sector hiring rate has fallen noticeably since the fall of 2013. The trend lines over the last two years – a falling hiring rate, an elevated open rate, and a declining layoff rate – are consistent with some construction firms having trouble employing workers for specific projects.
It is also worth noting that, on a seasonally adjusted basis, the construction sector unemployment rate stood at 8.8% for July (one month ahead of the JOLTS data), down from 10.7% a year ago. Construction sector unemployment peaked at 22% (seasonally adjusted basis) in February 2010.
Monthly employment data for July 2014 (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 2.285 million, broken down as 667,000 builders and 1.618 million residential specialty trade contractors.
Over the last year the residential construction sector has added 116,000 jobs. Since the point of peak decline of home building employment, when total job losses for the industry stood at 1.466 million, 301,200 positions have been added to the residential construction sector as of July. Over the last six months the home building and remodeling industry has added on average about 9,000 jobs per month.
For the economy as a whole, the June JOLTS data indicate that the hiring rate increased to 3.5% of total employment. The hiring rate has been in the 3.1% to 3.5% range since January 2011. The overall job openings rate increased to 3.3%, the highest rate of open jobs for the overall labor market since 2007. This signals good news ahead for job creation.