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Fri, 09/01/2023 – 12:23

Construction Employment Reaches 7,993,000 amid Strong Demand for Project, Firms Boost Pay to $34.40 an Hour as They Try to Attract a Limited Pool of Qualified Workers with Sector’s Unemployment at 3.9%

The construction industry added 22,000 jobs in August, while total construction spending rose 0.7 percent in July, despite a downturn in most infrastructure investment categories, according to an analysis of new government data the Associated General Contractors of America released today. Association officials cautioned that progress on many public infrastructure projects was likely being undermined by the added layers of red tape the Biden administration continues to add for new public works efforts.

“Today’s reports show there is no letup in demand for construction workers or private-sector projects,” said Ken Simonson, the association’s chief economist. “The industry is raising pay faster than other sectors amid persistently low unemployment. But contractors are frustrated by the slow pace of new public project awards.”  

Construction employment in August totaled 7,993,000, seasonally adjusted, an increase of 22,000 from July and 212,000 or 2.7 percent from a year earlier. That outpaced total nonfarm job growth of 2.0 percent over 12 months. Nonresidential construction firms—nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—added 21,000 employees for the month and 169,700 (3.7 percent) since July 2022. Employment at residential building and specialty trade contractors grew by 1,400 last month and 42,400 (1.3 percent) over 12 months.

Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—jumped by 5.7 percent over the year to $34.40 per hour in August. Construction firms paid a wage “premium” of 18.6 percent compared to the average hourly earnings for all private-sector production employees. However, contractors report difficulty finding qualified workers amid an unemployment rate of only 3.9 percent in August for jobseekers with construction experience.

Construction spending in July totaled $1.97 trillion at a seasonally adjusted annual rate, an increase of 0.7 percent from June and 5.5 percent from July 2022. Private residential spending climbed 1.4 percent for the month, while private nonresidential spending rose 0.5 percent. But public construction spending slid 0.4 percent as the largest infrastructure categories declined from June. Highway and street construction spending fell by 0.6 percent, transportation by 0.9 percent, and sewage and waste disposal by 1.2 percent.

Association officials noted that public construction activity has been hampered by a flurry of regulatory measures that are causing confusion and slowing approvals on projects. They noted that this week alone the administration issued new rules that will add to the confusion around what constitutes a water of the U.S. and others that seek to apply federal wage rates to projects funded by the so-called Inflation Reduction Act.

“It appears that the Biden administration can’t decide if it wants projects to get built or prefers to suffocate them with red tape,” said Stephen E. Sandherr, the association’s chief executive officer. “At some point, people are going to begin wondering what happened to all those projects the administration promised would be built.”

View the construction employment data.