Contractors Kept Hiring in July, Adding 25K Jobs
By Scott Judy | Originally posted on enr.com
Construction maintained its streak of monthly jobs gains in July, but an overall slowdown in hiring and an increase in the nationwide unemployment rate, to 4.3%, cast doubt on the ability of the U.S. economy to sustain growth moving forward.
“It appears that America is headed into recession,” said Anirban Basu, chief economist for Associated Builders & Contractors. While noting that some economists have been predicting an economic slowdown for more than two years—himself included—Basu said, “The recent slowing in economic activity feels different. Unemployment is climbing rapidly. Consumer spending growth has become more sluggish … [and] U.S. equity markets are generating large losses.”
Overall, the U.S. Dept. of Labor’s Bureau of Labor Statistics reported that the construction industry added an estimated 25,000 jobs in July, with a significant majority—18,700 workers—hired by specialty trade contractors. Of that amount, nonresidential specialty trade contractors added 11,300, while residential specialty firms boosted payrolls by 7,400 workers.
Building contractors added an estimated 3,700 positions overall, with nonresidential firms contributing 2,000 jobs to that total, and residential contractors hiring 1,700.
Meanwhile, heavy and civil engineering construction firms added an estimated 2,900 jobs in July.
While those numbers indicate construction firms plan to keep busy in the months ahead, ABC’s Basu notes that the latest economic news “is an indication that America is caught in a growth scare and that there is a growing consensus that the Federal Reserve has waited too long to begin reducing interest rates.”
While recognizing the optimism behind construction’s latest job gains, Basu added that “if the economy continues to weaken, and it appears poised to do precisely that, contractor confidence will begin to ebb.”
At the same time, Ken Simonson, chief economist for Associated General Contractors of America, noted in a press release that “the construction industry has maintained a steady pace of employment gains even as job growth has cooled in other sectors.”
Simonson added, “Both residential and nonresidential construction firms are adding workers, and the industry’s ‘wage premium’ is growing relative to other sectors,” noting that average hourly earnings for production and nonsupervisory employees in construction has increased by 4.4% in the past year, and is now $35.77 per hour.
Those job gains may be coming to an end, though. A July 30 press release from ABC noted, for instance, that its analysis shows construction job openings declined by an estimated 71,000 in June.
