Eye On Housing
The count of unfilled jobs in the overall construction sector reached another post-Great Recession high in March.
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) increased to 210,000 in March. The current estimate represents the highest monthly count of job openings since May 2007.
The open position rate (job openings as a percent of total employment) for March was 3%, also a cycle high. On a three-month moving average basis, the open position rate for the construction sector increased to 2.7%.
The overall trend for open construction jobs has been an 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.
The construction sector hiring rate, as measured on a three-month moving average basis, was effectively unchanged in March at 4.9%. In contrast, the quits rate for construction increased significantly in March, rising to a 2.4% rate. This bears watching in the months ahead as it may signal that employers are having trouble retaining existing workers given tight labor market conditions.
Monthly employment data for April 2016 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builders and remodelers hiring stalled in April, falling by 3,800. However the recent hiring pace remains stronger than the second half of 2015. The current 6-month moving average of jobs gains for residential construction is just under 19,000.
Residential construction employment now stands at 2.590 million, broken down as 728,000 builders and 1.86 million residential specialty trade contractors.
Over the last 12 months home builders and remodelers have added 141,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 603,800 positions.
In April, the unemployment rate for construction workers declined significantly to just under 6% 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.
For the economy as a whole, the March JOLTS data indicate that the hiring rate fell slightly to 3.7% of total employment. The overall open job rate rose to 3.9%, matching the cycle high set in July 2015.
Rising job openings for the overall economy are affecting many business sectors as the unemployment rate has fallen, with employers wanting new workers but holding greater numbers of unfilled positions. This could bode well for future hiring, but it also signals that scarcity for labor is becoming a more general concern.
Not sure how they calculate this but if you are out there, travelling the country, working with builders, suppliers & trades every week like me and our TrueNorth colleagus, you know that a 3% open position rate is grossly undercalculated. I’d really love to know how they do the math.