Deputy BLS Commissioner Philip Rones
commented, “Construction employment continued to trend down over the month
(-22,000), with most of the decline among residential specialty trade
contractors. Construction employment peaked last September; since then, 96,000
jobs have been lost.” Yet the report was full of good signs for nonresidential construction. The
nonresidential building, specialty trades and heavy and civil engineering
construction combined added jobs, both for the month and for the 12-month
period (+65,000, or 1.5%). Moreover, that gain may understate the actual growth
in nonresidential employment. Although residential building and specialty trade
employment fell by a reported 155,000 or 4.5% over 12 months, it is likely the
actual drop was closer to the roughly 16% decrease that has occurred in
residential spending over that span. Such a change would imply that up to
400,000 “residential” specialty trade contractors are actually doing
nonresidential work now, even though their companies still list their industry
as residential. Architectural and
engineering services employment, which typically leads to construction
activity, increased for the 31st straight month and was up 2.9% over
12 months, double the rate of overall job growth. Average hourly earnings for construction rose 0.4% in August,
seasonally adjusted, and 4.5% over 12 months, compared with a 3.9% increase for
all private nonsupervisory or production workers, suggesting that contractors
are still bidding up wages to attract workers. The unemployment rate in construction (not seasonally adjusted) fell
from 5.9% in August 2006 to August 2007, while holding steady overall (at
4.6%).
Other
less complete but recent information sources also suggest nonresidential
construction is holding up well. The value
of nonresidential construction starts from January through August 2007
climbed 19% year-to-date (YTD) from the same months of 2006, Reed Construction
Data reported today, based on its proprietary database. Nonresidential building
construction was up 20%; heavy engineering, 16%. Both figures were a bit less
robust than the preliminary January-July YTD gains reported last month but
still reflected increases in most major components.