Eye On Housing
The November jobs openings rate for the construction sector (2.3%) was the highest since April 2007 according to the BLS Job Openings and Labor Turnover Survey (JOLTS). The job openings rate measures the number of unfilled positions as a share of total sector employment.
While the recent increase in unfilled positions is consistent with the increase in construction sector activity, particularly for home building, the data continue to reflect only modest growth in total employment. The rise in the count of open positions is thus consistent with reports of local labor shortages.
For the construction sector, monthly gross hiring fell back, declining from 329,000 to 294,000 from October to November. Over the same period, the hiring rate, as measured on a 3-month moving average basis, fell from 5.3% to 5.2%. The pace of construction hiring has slowed during 2013 compared to 2012 levels.
Consistent with reports of some labor shortages for builders, the count of open, unfilled positions in the construction industry was the highest since May 2008. The total of unfilled positions in the sector for November (139,000) marks nine out of the last eleven months for which this number has equaled or exceeded 100,000.
Measured as a three-month moving average, the openings rate (the blue line above) has staged a noticeable rise since September 2012, with a brief pause during the middle of 2013. This rise occurred at the same time as the hiring rate began to fall.
Combined with a declining sector layoff rate (non-seasonally adjusted), charted as a 12-month moving average in the graph above, the uptick in open positions since 2012 suggests more, if modest, construction hiring in the months ahead – if firms can find workers with the right skills.
Monthly employment data for December 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 2.177 million, broken down as 601,000 builders and 1.576 million residential specialty trade contractors.
According to the BLS data, year-over-year, the home building sector has added 100,000 jobs. Since the point of peak decline of home building employment, when total job losses for the industry stood at 1.466 million, 193,000 positions have been added to the residential construction sector. For 2013, home building employment is averaging monthly net growth of about 8,300 positions.
For the economy as a whole, the November JOLTS data indicate that the hiring rate was unchanged at 3.3% of total employment. The hiring rate has been in the 3.1% to 3.4% range since January 2011. The job openings rate (2.8%) has been at this level for three straight months. This job openings rate matches the post-recession high.
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