Construction Firms Add 39,000 Jobs in January

March 2015

Construction employers added 39,000 jobs in January and 308,000 over the past year, reaching the highest employment total since February 2009, as the sector’s unemployment rate fell to 9.8 percent, according to an analysis by the Associated General Contractors of America. Association officials said the job gains come as most construction firms report plans to expand headcount this year, but worry about growing shortages of qualified workers.

“Contractors have stayed busy this winter and expect to keep hiring through 2015—if they can find the workers they need,” said Ken Simonson, the association’s chief economist. “The list of projects is growing in most states and most nonresidential segments, in addition to continuing strong demand for apartment buildings.”

Construction employment totaled 6,314,000 in January, the highest level in nearly six years, with a 12-month gain of 308,000 jobs or 5.1 percent, Simonson noted. Residential building and specialty trade contractors added a combined 20,100 employees since December and 162,400 (7.2 percent) over 12 months. Nonresidential contractors-building, specialty trade, and heavy and civil engineering construction firms-hired a net of 18,600 workers for the month and 145,600 (3.9 percent) since January 2014.

The number of workers who said they looked for work in the past month and had last worked in construction fell from 1,045,000 a year earlier to 811,000—the lowest January mark since January 2000. Although winter conditions typically result in a high January unemployment rate for construction, the 9.8 percent unemployment rate for these workers was the lowest January rate since January 2007 and represented a steep drop from a year earlier, when the rate was 12.3 percent.

“The combination of rapidly rising employment, good prospects for 2015, and a depleted pool of unemployed workers with construction experience means contractors may have a hard time filling jobs with the workers they need in coming months,” Simonson said. “Worker availability challenges have replaced a lack of projects as the biggest worry for many contractors.”

AGC officials noted that the new construction employment data is consistent with its Construction Hiring and Business Outlook, where 80 percent of construction firms reported they plan to expand head counts in 2015 (see previous article). But they cautioned that 87 percent of firms report having a hard time finding qualified workers.

“Construction firms appear ready to add jobs this year at the fastest rate in a decade,” said Stephen E. Sandherr, AGC’s chief executive officer. “But those employment gains depend on finding new ways to expose and prepare high school students for high-paying careers in construction.”