The unemployment rate across all U.S. industries ticked down slightly in January but wasn’t helped by construction.
The construction industry’s rate rose to 8.5 percent in January, the highest level since March of 2015, according to an analysis of U.S. Bureau of Labor Statistics data by Associated Builders and Contractors (ABC). The overall U.S. rate shed a tenth of a percentage point and now sits at 4.9 percent, the lowest level since February of 2008.
The construction industry added 18,000 net new jobs in January and 264,000 over the past 12 months, a 4.2-percent increase. The nonresidential construction sector added just 2,900 jobs in January after adding 16,200 jobs in December and 17,100 new jobs in November.
January’s nonresidential figure was hampered by the nonresidential specialty trade contractor subsector, which lost 2,400 jobs for the month. The residential sector added 20,100 net new jobs, while the heavy and civil engineering segment lost 5,200 jobs.
“Contractors have been wrestling with shortfalls in appropriately trained workers,” says ABC chief economist Anirban Basu. “The implication is that more people are beginning to realize there are growing opportunities to find work in the industry. It is also likely that the rising unemployment rate is a reflection of large numbers of dislocated energy workers now looking for work in occupations where their skill sets translate.”
“There are also reasons to place less weight on weakness in nonresidential job creation in January,” says Basu. “First, seasonal factors wreak havoc on construction data this time of year. Second, much of the weakness was in heavy and civil engineering, which by most accounts can look forward to a brighter future, given recent federal funding commitments. For now, the nonresidential construction recovery remains in place, but there are indications that cracks are forming in the ongoing economic recovery, and that those cracks could widen further as the year progresses.”
Despite the monthly loss, employment in the nonresidential specialty trade contractors category is up by 95,800 jobs or 4.2 percent from the same time one year ago.