Nonresidential Construction Employment Remains Modest in September

"Today’s release confirms that nonresidential construction’s expansion continues to be a moderate one."—ABC Chief Economist Anirban Basu.

The U.S. construction industry added 16,000 jobs in September, according to the Oct. 3 Bureau of Labor Statistics preliminary estimate. The August estimate was revised downward from 20,000 to 16,000 net new jobs. Nonresidential construction added 3,200 jobs in September, accounting for only 20 percent of the total gain in construction employment.

"After a disappointing August jobs report, today’s data reaffirms the ongoing momentum in the broader national economy," said Associated Builders and Contractors Chief Economist Anirban Basu. "Today’s release also confirms that nonresidential construction’s expansion continues to be a moderate one, with the industry adding only a few thousand jobs in September. Much of the momentum in construction continues to be in multifamily residential development."

The national construction unemployment rate fell to 7 percent on a non-seasonally adjusted basis in September, its lowest level since November 2007. "Though today’s report mostly provided good news, there are some red flags that nonresidential construction industry leaders should consider, the most important of which is the decline in the overall unemployment rate," said Basu. "Most people will cheer the unemployment rate decline for good reason. However, lower unemployment could make it more difficult for employers to secure skilled labor and could lead to an increase in interest rates next year."

According to the Bureau of Labor Statistics’ household survey, the national unemployment rate fell to 5.9 percent in September. This small change is at least partially explained by a decline in the labor force, which shrank by 97,000 workers in September. The labor force participation rate continued to slide, inching down to 62.7 percent.

Construction employment for the month and the past year breaks down as follows.
•Nonresidential building construction employment remained unchanged for the month and the sector has added 20,800 jobs (3.1 percent) since September 2013.
•Residential building construction added 6,200 jobs in September and 59,700 jobs (9.7 percent) on an annual basis.
•Nonresidential specialty trade contractors added 3,200 jobs for the month and employment in that category is up by 50,500 jobs (2.4 percent) compared to the same time one year ago.
•Residential specialty trade contractors gained 5,600 jobs in September and have added 69,700 jobs (4.5 percent) since September 2013.
•The heavy and civil engineering construction segment added only 500 jobs in September, but job totals are still up by 29,000 (3.3 percent) on a year-over-year basis.

To view the previous employment report, click HERE.