Declines for Residential Construction Employment as Job Openings Persist

The count of unfilled jobs in the overall construction sector remained elevated in April after a post-Great Recession high in March. However, the count of total jobs in the residential construction sector has declined for two straight months.

According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and NAHB analysis, the number of open construction sector jobs (on a seasonally adjusted basis) fell to 200,000 in April, after a cycle high of 215,000 in March. The March estimate represents the highest monthly count of job openings since May 2007.

The open position rate (job openings as a percent of total employment) for April was 2.9%, near the cycle high. On a three-month moving average basis, the open position rate for the construction sector increased to 3%.

The overall trend for open construction jobs has been an increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.

The construction sector hiring rate, as measured on a three-month moving average basis eased to 5.1% in March.

Monthly employment data for May 2016 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builders and remodelers net hiring continued to be weak, as sector employment declined by 4,400, after posting a 5,200 decline in April. These two monthly declines reduced the 6-month moving average of jobs gains for residential construction to 10,000. Declines in multifamily starts may be a factor for the recent sector employment weakness.

Residential construction employment now stands at 2.584 million, broken down as 724,000 builders and 1.86 million residential specialty trade contractors.

Over the last 12 months, home builders and remodelers have added 128,000 jobs on a net basis. Since the low point of industry employment following the Great Recession, residential construction has gained 597,500 positions.

In May, the unemployment rate for construction workers declined significantly to 5.6% on a seasonally adjusted basis. The unemployment rate for the construction occupation had been on a general decline since reaching a peak rate of 22% in February 2010.

Article featured on eyeonhousing.org