Industry Adds Jobs at Faster Rate than Overall Economy as Average Hourly Wages Outpace Rise in Private Sector Earnings; Construction Unemployment Rate of 5.4 Percent Matches Year-Ago Level
Construction sector employment increased by 13,000 positions in March as rising wages enabled the industry to add workers more rapidly than other sectors, according to an analysis of new government data the Associated General Contractors of America released today. Association officials cautioned that newly announced tariffs and potential retaliatory measures from U.S. trading partners have the potential to undermine future employment growth in the sector.
“Contractors added employees at a faster clip than other sectors in March, as pay for construction craft workers outpaced wages for production workers in the overall private sector,” said Ken Simonson, the association’s chief economist. “However, as steep new tariffs and foreign countries’ retaliatory measures take effect, building costs will rise and projects will be put on hold, posing a threat to employment.”
Construction employment in March totaled 8,313,000, seasonally adjusted, an increase of 13,000 from February. Headcount rose by 143,000 jobs or 1.8 percent during the past 12 months, topping the 1.2 percent growth rate in total nonfarm payroll employment.
In March, nonresidential construction firms added 22,300 workers, with gains of 19,300 among specialty trade contractors and 3,400 in heavy and civil engineering construction firms, which offset a dip of 400 workers at nonresidential building construction firms. Residential construction employment declined by 9,800, as homebuilders and other residential building construction firms added 3,100 positions but residential specialty trade contractors shed 12,900 workers.
Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—climbed by 4.1 percent over the year to $36.79. per hour. That gain exceeded the 3.9 percent rise in pay for such workers in the overall private sector.
The unemployment rate among workers with recent construction experience was 5.4 percent in March, unchanged from a year earlier. That suggests contractors are holding on to current employees, even though other recent data shows a slowdown in hiring, job openings, and project spending, Simonson noted.
Association officials welcomed the employment gains in March but noted that new tariffs on virtually every country announced on April 2 are likely to undermine demand for construction in the short-term as developers and public officials evaluate whether to proceed with planned projects amid rising materials prices and construction costs. Yet to be determined is whether those short-term impacts will be offset by longer-term increases in manufacturing construction, officials added
“The construction sector grew at a steady clip in March, buoyed in large part by robust public-sector investments in construction activity,” said Jeffrey D. Shoaf, the association’s chief executive officer. “The real question is how the newly announced tariffs will impact the industry in the short and long-term.”
View the construction employment data.