Construction loses 9,000 jobs in March

Data released today by the U.S. Bureau of Labor Statistics shows tath the construction industry lost 9,000 jobs on net in March.

But on a year-over-year basis, the industry has grown by 196,000 jobs, marking a 2.5% increase. 

On a month-over-month basis, residential construction lost 7,000 jobs, but has increased 1.4% and 46,300 positions on a year-over-year basis.

Residential specialty trade contractors fell by 7,800 in March. Compared to a year ago, trade contractor jobs increased by 1.1% or 25,700 positions.

Nonresidential construction employment fell by 1,800 positions on net, with declines in 2 of the 3 subcategories. Nonresidential specialty trade lost 6,100 positions, while the number of nonresidential building jobs decreased by 2,800. Heavy and civil engineering added 7,100 net new jobs.

The construction unemployment rate declined to 5.6% in March. Unemployment across all industries decreased from 3.6% in February to 3.5% last month.

“The March employment report may hint at growing economic weakness in the months to come,” said ABC Chief Economist Anirban Basu. “While the nonresidential construction industry lost fewer than 2,000 jobs, the addition of jobs in publicly financed construction categories masks more substantial weakness in private segments. It is precisely those private segments that tend to be most affected by slowing economic growth, deteriorating confidence, and concerns regarding the nation’s banking system.”

Basu also notes that headwinds are building in the industry. 

“Recession remains a likely outcome within the next 12 months,” he said. “Contractors generally report a healthy backlog and confidence regarding the next six months, but the industry may be positioned for meaningfully weaker conditions in 2024.”

National Association of Home Builders Chief Economist notes that the count of open construction jobs increased from a revised reading of 283,000 in January to 412,000 in February. This came after a data series high of 488,000 in December 2022. 

“The January data point appears to be an outlier, but the overall trend is one of cooling for open construction sector jobs as the housing market slows and backlog is reduced,” Dietz said in a recent Eye on Housing blog post.

The rate of open construction jobs decreased to 4.9% in February after a 5.8% data series high in December 2022.

Dietz said the combination of these estimates points to the construction labor market having peaked in 2022 and is now entering a cooling stage as the housing market weakens.