Job Growth Continues for Builders and Remodelers

The count of unfilled jobs in the construction sector was below trend for the second consecutive month, as hiring has accelerated in the industry.

According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the number of open construction sector jobs (on a seasonally adjusted basis) came in at 147,000 in January. The cycle high was 238,000 set in July of last year.

The open position rate (job openings as a percent of total employment) for January was 2.1%. On a smoothed twelve-month moving average basis, the open position rate for the construction sector held steady at 2.7%, near the cycle high.

The overall trend for open construction jobs has been increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders. However, a recent increase in hiring has reduced the current level of unfilled jobs in the sector. In fact, the hiring rate in December and January, 5.9% and 5.6% respectively, mark the strongest two months since late 2014.

The construction sector hiring rate, as measured on a twelve-month moving average basis, increased to 5.1% in January. The twelve-month moving average for layoffs was steady (2.7%), remaining in a range set last fall. Quits have been rising recently, increasing to 2.3% at the start of 2017.

Monthly employment data for February 2017 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builder and remodeler employment continued to grow at a fast pace, increasing by 18,900. The February gains continue the improvement in place since November that followed a period of hiring weakness early in 2016. The 6-month moving average of job gains for residential construction has now increased to a more robust gain of 18,300 a month.

Residential construction employment now stands at 2.707 million, broken down as 767,000 builders and 1.94 million residential specialty trade contractors.

Over the last 12 months home builders and remodelers have added 136,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 724,600 positions.

In February, the unemployment rate for construction workers stood at 6.5% on a seasonally adjusted basis. The unemployment rate for the construction occupation had been on a general decline since reaching a peak rate of 22% in February 2010, although it has leveled off in the 6% to 7% range since the middle of 2016.



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