Construction employment nationally sagged in August amid the ongoing pandemic and supply chain disruptions brought on by it.
As for specific types of jobs, nonresidential construction employment overall fell by 20,300, according to data from the Bureau of Labor Statistics released Friday. Meanwhile, nonresidential specialty-trade contractors lost 9,200 jobs and heavy and civil-engineering firms lost 8,300 positions. Nonresidential building employment dipped by 2,800 positions also.
Even though employment fell, the construction industry’s unemployment rate dropped sharply to 4.6% in August, from 6.1% in July. Meanwhile, the unemployment rate for all industries fell from 5.4% in July to 5.2% in August.
Anirban Basu, chief economist for the Associated Builders and Contractors, attributed the weaker-than-expected jobs picture to the effects of the Delta coronavirus variant and to prolonged supply-chain disruptions.
“While the ongoing pandemic clearly had an impact on employment in segments such as retail, lodging and restaurants in August by suppressing demand for additional workers, construction employment dynamics were more affected by ongoing supply-side bottlenecks,” Basu said.
A drop in employment, coupled with a drop in the unemployment rate, suggests the total construction workforce isn’t growing, Basu said. That’s a sing that labor costs could continue to rise, even if other factors, such as materials delays, continue to frustrate the industry.
“With the delta variant causing additional supply chain disruptions in Asia and elsewhere, materials prices may not decline as rapidly as had been hoped,” Basu said. “This potentially sets the stage for waning industry momentum as 2022 approaches. The good news is that today’s weak employment numbers will likely help keep interest rates lower for a lengthier period.”Follow @natebeck9