Good Civil Construction Job Numbers Just Out From the US Bureau of Labor Statistics
The Associated Builders and Contractors (ABC), released some encouraging numbers for the civil construction sector after an analysis of the latest September job numbers released by the US Bureau of Labor Statistics last October 2018. According to this report from DCD, 23,000 net new positions were added by the US construction industry in September alone.
The best news for the 2018 construction job numbers overall is in the nonresidential construction sector where employment grew at a very robust pace at 186,000 jobs added each month.
Meanwhile, the residential construction sector added just 4,400 net jobs, which may be a reflection of the cooling housing market which peaked last summer, according to the real estate watchdog site, Curbed. The lagging residential sector contributed to a slight increase to 4.1% in construction unemployment but is still quite low by historical standards. National unemployment across all industries is now down to 3.7%, which the DCD report states are the lowest numbers since 1969.
Despite those housing market troubles, the expanding civil construction sector combined with encouraging national unemployment numbers have given rise to speculation among US economic gurus. We may be enjoying the benefits of conducting business in a bustling economy where everything is "just right".
According to ABC Chief Economist Anirban Basu, the term "Goldilocks Economy" surfaces when solid employment growth boosts consumer confidence enough to keep them spending. But not so rapidly as to trigger inflation or interest rate spikes which cause asset prices such as stocks, bonds, and real estate to drop in value.
This is essentially where we are now, but Basu warns these encouraging "Goldilocks" employment numbers are not the most important for contractors on the search for new construction talent. For them, the critical number is average hourly earnings growth.
Construction Careers in The Goldilocks Economy
Industries across the board will face hiring challenges in the midst of the Goldilocks economy when hourly earnings growth is at the high point of the cycle as it is now.
Basu notes, in particular, the challenges of recruiting for junior construction positions when contractors are facing wage competition with a $15/hour minimum wage for entry-level workers from companies such as Amazon. Rising compensation costs to attract and retain skilled personnel are coupled with an aging workforce and an inherent lack of interest in the construction field in the millennial generation's potential talent pool. Economist Basu characterizes the situation in construction recruiting as "the grinding search for talent".
According to a recent report at RSM, a middle market consulting firm, the construction industry is producing just one replacement worker for every four who leave the workforce. At the professional level in the construction and extraction sectors, construction or project manager positions are projected to grow by 11% through 2026, as reported at ConstructConnect.
Civil engineers also make the top 10 list of fastest growing construction careers at 11% growth over the same period. Seventy-five percent of firms expect to add to their workforces, and 82% anticipate difficulties filling those positions with qualified talent.
As the ConstructConnect article notes, "the time is ripe for setting yourself up in a career in construction."
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