Construction employment trending up
Construction employment increased in 2013 for the first time since the Great Recession, the beginning of two consecutive years of solid growth in construction employment. In 2014, construction employment increased to 9.8 million workers — the highest level in six years — up from 8.9 million in 2012, reports the Center for Construction Research and Training and its first Quarterly Data Report published in March titled “Employment Trends and Projections in Construction.”
Employment for Hispanics in the construction trades gained almost 250,000 jobs between 2012 and 2013, more than two-thirds of the employment growth in the industry.
All three construction subsectors continued improvement through 2014, although the number of construction workers was still below 2007 levels. Heavy and civil engineering employment is down 7%, construction of buildings is 33% below and specialty trade contractors (including plumbers and mechanical contractors) are 31% below their pre-crisis levels.
“Although construction employment in 2014 was still below the 2007 level, the economy showed continued signs of improvement since 2010,” the report states.
Construction unemployment rates peaked in 2010 at 27%; in October 2014, the rate was 6.4%. And the number of job openings, separations and hires in the past year confirms that construction employment is on the rebound. The CCRT report notes that employment for plumbers grew 8.7% between 2010 and 2013, while construction laborers increased 24.3%.
“On average, monthly hires outweighed separations by about 25,000 jobs per month in 2014,” the report says. “Job openings also have seen a steady increase since the end of the recession.”
This is holding true for 2015 as April posted the strongest monthly improvement in construction jobs since January 2014, rising by 45,000, the Bureau of Labor Statistics reports.
From April 2014 to April 2015, construction employment grew by 4.6% to 6,383,000, the highest level since March 2009, says Ken Simonson, chief economist of the Associated General Contractors of America. Residential construction employment (residential building and specialty trade contractors) climbed by 23,600 for April 2015 and 153,300 over 12 months. Nonresidential employment (building, specialty trades, and heavy and civil engineering construction) increased by 20,800 in April and 126,100 in the last year.
“The acceleration in wages and decline in the pool of experienced job seekers suggests that contractors soon may have even greater difficulty than they have reported recently in finding qualified new hires,” Simonson explains.
Union membership among all construction workers rose during the economic recovery, the CCRT report notes, with an increase from 953,700 in 2010 to 1,058,600 in 2013. Almost 27% of plumbers belonged to a union from 2011 to 2013, while only 13% of HVAC techs were unionized.
Total compensation in the construction trades (wages, salaries, benefits and required employer payments for social insurance and workers compensation) increased 1.8% from the first quarter of 2014 to the first quarter of 2015, the Bureau of Labor Statistics reports. Private industry workers saw a 2.8% climb in compensation over the same time period.
“It is likely that the smaller increase and lack of acceleration in compensation in construction reflects a compositional shift, as employment rose more in the lower-paid residential building and specialty trade segments (6.0% from March 2014 to March 2015, according to an AGC analysis of BLS data) than in the higher-paid nonresidential building, specialty trades, and heavy and civil engineering segments (3.8%),” Simonson explains.
The BLS notes construction wages and salaries increased 2% during the same period, up from 1.3% a year earlier and the highest annual improvement since 2009.
The CCRT’s employment projections look especially upbeat for construction workers, with nearly 30% growth between 2012 and 2022 — an annual improvement of about 2.6%. “In particular, residential building is projected to expand nearly 50% within the 10-year period,” the report says. Nonresidential building will grow 26% in that same time period.
Plumbers, HVAC technicians and welders will see a jump in employment in that 10-year window — 27.8%, 29.3% and 25.9%, respectively.
Geographically, the CCRT report says Florida, Georgia and the Western states are expected to increase construction employment between 2012 and 2022 by 25%. Nevada may reach up to 50% growth while Maine will see 3%.
These stats only work if the economic recovery stays on course. But it’s never too early to start preparing for the future. Make sure you have the systems in place to hire the right people at the right time. If you can’t find enough people with the technical skills you require, look around your community for people with great sales technique and “grow your own” plumbers and heating technicians.
The future is bright, but don’t keep your shades on.