"Today’s jobs report was a stunner and construction was not spared as the sector lost jobs for the first time in 15 months." —ABC Chief Economist Anirban Basu.
Nonresidential construction added 5,000 net new jobs in March, with nonresidential specialty trade contractors leading the way by contributing 4,400 new jobs, according to the April 3 Bureau of Labor Statistics preliminary estimate. As a whole, the U.S. construction industry lost 1,000 jobs in March, while February’s construction employment estimate (29,000 new jobs) was unrevised. The residential sector also regressed in March, losing 2,800 jobs.
"Today’s jobs report was a stunner and construction was not spared as the sector lost jobs for the first time in 15 months," said ABC Chief Economist Anirban Basu. "Coming into the week, the consensus estimate for March’s net new job creation was in the range of 250,000. An ADP report released earlier in the week indicated that the U.S. private sector only added 189,000 jobs, which brought the consensus estimate closer to 200,000, however the initial Bureau of Labor Statistics’ estimate for March fell well short of even that diminished expectation.
"The knee-jerk reaction is to blame the weather," said Basu. "While that seems natural, the fact of the matter is that the latest employment release comes on top of a sea of other data indicating that the U.S. economy has been losing momentum since the third quarter of last year and retail sales and manufacturing-related data have been among the sources of disappointment.
"Weather serves as a potential partial explanation, but another possibility is that some of the slowdown in job growth is attributable to reduced activity in the nation’s energy sector," said Basu. "While lower fuel prices are helping to support various forms of activity, the impact on oil producers has been jarring. Those operating in the oil exploration and production segments of the economy have come to dominate layoff announcements recently. It may be that the negative impacts of lower energy prices are felt more intensely in the short-term, but that the positive effects will become obvious later this year."
The national unemployment rate remained unchanged at 5.5 percent in March, though this is not necessarily a good thing. The labor force lost 96,000 workers in March after losing 178,000 in February. The labor force participation rate currently sits at 62.7 percent, equaling its lowest level since 1977. The construction unemployment rate fell to 9.5 percent in March, a 1.1 percent decrease from March. The falling construction unemployment rate is not something to celebrate, though; this too is a direct reflection of a shrinking labor force.
Construction employment for the month and the past year breaks down as follows:
• Nonresidential building construction employment expanded by 5,700 net new jobs for the month and is up by 31,600 jobs (4.6 percent) since February 2014.
• Residential building construction employment shrank by 500 jobs in February, but is still up by 45,300 jobs (7 percent) on an annual basis.
• Nonresidential specialty trade contractors added 10,000 jobs for the month and employment in that category is up by 86,100 jobs (4 percent) from the same time one year ago.
• Residential specialty trade contractors added 17,200 net new jobs in February and 122,500 total jobs (7.5 percent) since February 2014.
• The heavy and civil engineering construction segment shed 3,700 jobs in February, but employment is by 35,700 positions (4 percent) on a year-over-year basis
To view the previous employment report, click HERE.