Given the growing number of economic impacts from mitigation efforts associated with the coronavirus, early 2020 labor market data is of much reduced analytical value. However, the data help to describe where the economy was before the shocks of March and the potential for gains in an eventual rebound we expect to take hold during the fourth quarter.
February data from the BLS Job Openings and Labor Turnover Survey (JOLTS) indicate that construction job openings were stable on a year-over-year basis. The estimated number of job openings increased from 267,000 in January to 279,000 in February. Compared a year ago, job openings were relatively unchanged (277,000 in February 2019).
The open positions rate (job openings as a percentage of total employment plus current job openings) increased to 3.5% in February, after reaching a cycle high of 5.7% in April 2019. On a smoothed, twelve-month moving average basis, the open position rate for the construction sector held steady at 4.1%. 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.
Since late 2019, the overall trend for construction job openings has leveled off, which was an indication of slight improvements in terms of the skilled labor challenge. NAHB and other survey data revealed that access to skilled labor remains a top business challenge for builders, affecting a broad set of occupations.
However, the future March JOLTS data are expected to show a transformed labor market, given 10 million new jobless claims and an expected surge in the unemployment rate. Given the dramatic events in the labor market associated with virus mitigation, construction could be a sector that leads an eventual recovery. To do so, hiring will need to accelerate once certainty is achieved for the overall economy. Future jobs data will reveal whether this occurs.