The construction labor market remains tight, as the levels of quits rise.
The count of open construction jobs declined to 345,000 unfilled positions in November, after recording the highest measure in the history of the data series (going back to late 2000), 445,000 in October. The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory.
Hiring in the construction sector remained solid in November, rising to a 5.6% growth rate. The post-virus peak rate of hiring occurred in May 2020 (10.3%) as a rebound took hold in home building and remodeling. Hiring slowed in early 2021, with the exception of a weather-related rebound in March 2021. While hiring has been impeded due to a lack of workers, jobs gains have increased during the second half of 2021.
Construction sector layoffs ticked up in November to a 2.4% rate. In April 2020, the layoff rate was 10.9%. Since that time however, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects. The rate has trended lower in 2021 due to the skilled labor shortage.
The job openings rate in construction edged down to 4.4% in November, with 345,000 open positions in the sector. This is significantly higher than the 261,000 count recorded a year ago.
The number of job quits for the overall economy continues to rise as the Great Resignation continues. More than 4.5 million workers quit their jobs in November. Quits increased somewhat in construction, rising to 207,000 in November, a data series high.
Looking forward, the construction job openings rate is likely to see increased upward pressure as both the residential and nonresidential construction sectors trend higher. Attracting skilled labor will remain a key objective for construction firms in the coming quarters and will become more challenging as the labor market strengthens and the unemployment rate declines.