Construction industry adds nearly 20,000 jobs in July, but finding workers is still a challenge

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The Associated General Contractors (AGC) announced the construction industry added 19,000 jobs in July while the sector’s unemployment rate increased, according to a recent data analysis. Employers are bumping pay levels up in search of labor which has drawn previously employed workers back into the job market, AGC officials added.

“The construction industry continues to add workers at a steady clip as demand for many types of construction remains strong. Firms are boosting pay to cope with tight labor market conditions, which is bringing more former workers back into the job market,” said Stephen E. Sandherr, chief executive officer of AGC.

As of July, there were 7.9 million people employed in the construction industry, an addition of 19,000 compared to June, AGC officials said. That number is seasonally adjusted. Construction added 198,000 jobs (2.5%) during the past 12 months, officials added.

Nonresidential construction, which includes nonresidential building and specialty trade contractors and heavy and civil engineering construction firms, added 10,600 employees (3.1%) in July, according to AGC. Residential building and specialty trade contractors grew employment by 7,800 (1.8%).

The construction unemployment rate was 3.9% in July, an increase over June (3.6%) and May (3.5%), according to the Bureau of Labor Statistics (BLS). That’s a higher year-over-year rate compared to 3.5% in July of 2022.

According to AGC analysts, a separate government release reported there were 378,000 openings at construction firms at the last day of June, close to the record high for June set in 2022.

The average hourly earnings for production and nonsupervisory employees in construction, including most onsite craft workers as well as many office workers, jumped 5.8% year-over-year to $32.24 per hour, AGC officials said. In July, Construction companies provided a wage “premium” of just over 18% compared to the average hourly earnings for all private-sector production employees, officials added.

Labor shortages in construction still loom over federal investments in infrastructure (Infrastructure Investment and Jobs Act), semiconductor chip plants (CHIPS and Science Act) and green energy construction, association officials said. AGC, which lobbies to the U.S. government, urged federal officials to boost funding for construction education and training programs.

Officials noted the federal government spends five times as much encouraging students to attend colleges as it does on career and technical education programs.

“Unless federal officials begin to narrow the funding gap between college prep and career training the construction industry will continue to struggle to find workers. It is great that federal officials want to invest in construction projects, they also need to invest in construction workforce development,” said Sandherr.