Nonresidential Specialty Trades Employment off to Slow Start in 2016

The U.S. construction industry saw an increase in employment in February, but the nonresidential specialty trades subsector wasn’t as fortunate.

The industry as a whole added 19,000 net new jobs in February, according to Associated Builders and Contractors’ (ABC) analysis of U.S. Bureau of Labor Statistics employment data.

Year-over-year, it added 253,000 net new jobs, an increase of 4 percent. The nonresidential sector added just 2,800 net new jobs in February after adding 3,600 jobs in January (revised upward from 2,900).

Nonresidential specialty trade contractors, however, lost jobs for the second consecutive month, while residential specialty trade contractors added 13,800 net new jobs in February—more than the other four subsectors combined.

“Though many contractors continue to report significant backlog, the broader macroeconomic data regarding construction do not reflect brisk industry recovery,” says Anirban Basu, ABC’s chief economist. “Rather, the data are consistent with steady, ongoing recovery in both spending and employment. Though today’s employment report will be viewed positively by most stakeholders in the economy, it was not a great report for nonresidential construction.”

The nonresidential specialty trade contractor subsector lost 1,500 jobs in February, a second straight monthly decline in the category that contrasts a 31,000-job increase in the initial two months of 2015.

“Despite this recent softness in the nonresidential employment data, recent nonresidential construction spending data were quite strong,” says Basu. “There is no indication in today’s release that the ongoing nonresidential construction recovery is in any way jeopardized. Undoubtedly, seasonal factors are at work, and it is likely that the industry will see progress in the value of construction put in place, employment, profitability and wage growth.”

The construction industry unemployment rate climbed to 8.7 percent in February, a 0.2 percent increase from January. The industry’s unemployment rate has now increased by 3.2 percent since September 2015. The unemployment rate across all industries remained unchanged at 4.9 percent.

Nonresidential building construction employment expanded by 4,300 jobs in February and is up by 14,100 jobs or 1.9 percent on a year-over-year basis. Residential building construction employment expanded by 2,100 jobs in February and is up by 32,200 jobs or 4.7 percent on a year-ago basis.

For the year, nonresidential specialty trade contractor jobs are up 76,300 jobs or 3.3 percent. Residential specialty trade contractors have added 122,900 jobs or 7.0 percent since February 2015.