The construction industry added 15,000 jobs on net in June, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has increased by 121,000 jobs, or 1.5%.
Nonresidential construction employment expanded by 9,200 positions on net, with growth registered in just 1 of 3 major subcategories. Nonresidential specialty trade added 12,400 jobs, while heavy and civil engineering and nonresidential building lost 2,800 and 400 jobs, respectively.
The construction unemployment rate fell to 3.4% last month. Unemployment across all industries declined from 4.2% in May to 4.1% in June.
鈥淰irtually every economist has been waiting for indications of stagflation,鈥� said ABC Chief Economist Anirban Basu. 鈥淭he wait continues. June鈥檚 employment report, coupled with recent inflation data, indicate that the U.S. economy continues to demonstrate solid momentum, stable unemployment and declining inflation. Construction added jobs for a second consecutive month.
鈥淲hile many will cheer this jobs report, some construction firm leaders may not be among that group,鈥� said Basu. 鈥淲hile abating fears of recession are comforting, these data effectively slammed the door shut on a July Federal Reserve interest rate cut. A growing fraction of contractors is experiencing weakness in backlog as projects are postponed in an uncertain economic environment coupled with stubbornly elevated borrowing costs.
鈥淎t the same time,聽聽have begun to edge higher, in part because of substantial tariffs on steel, aluminum, Canada, Mexico and China,鈥� said Basu. 鈥淎ll things equal, that will drive up construction delivery costs, render more projects uneconomical and diminish contractor margins. Shifting immigration policy stands to reinforce these dynamics. Close attention should be paid to the profit margins component of聽聽in the coming months, which should reflect how these higher costs are affecting contractor operations.鈥�
