Eye On Housing
Data from the BLS Job Openings and Labor Turnover Survey (JOLTS) indicate that construction job openings increased in July, after a declines off a cycle high count for April. The estimated number of job openings in the construction sector increased to 373,000 in July after reaching a post-Great Recession high of 434,000 in April. The July 2019 count of unfilled jobs represents a year-over-year gain relative to the 314,000 estimated unfilled construction jobs in July 2018.
The open position rate (job openings as a percentage of total employment plus current job openings) increased to 4.7% in July, after reaching a cycle high of 5.5% in April. On a smoothed, twelve-month moving average basis, the open position rate for the construction sector held steady at 4.2%. The peak (smoothed) rate during the building boom prior to the recession was just below 2.7%. For the current cycle, the sector has been above that rate since October 2016.
The overall trend for open construction jobs has been increasing since the end of the Great Recession. This matches NAHB and other survey data revealing that access to skilled labor remains a top business challenge for builders, affecting a broad set of occupations. However, more modest growth rates for housing construction for 2019 and 2020 are likely to place downward pressure on construction job openings in future data releases. That is, 2019 may be the year in which the job openings rate for construction levels off, albeit at elevated levels. This would nonetheless be a continuing sign for the need for additional worker recruitment into the industry.
The construction sector hiring rate, as measured on a twelve-month moving average basis, was steady at 5.3% in July. The twelve-month moving average for layoffs came in at 2.5%, after somewhat elevated levels of construction layoffs in recent months, likely connected to some market churn associated with the recent home construction soft patch due to affordability concerns.
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