National construction employment remained largely unchanged in March, adding 6,000 net new jobs on a seasonally adjusted basis, according to analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors (ABC). The nonresidential construction sector added 13,300 net new jobs for the month, while the residential sector lost 7,600 net jobs.
“While today’s jobs report will be viewed primarily as a disappointment, nonresidential construction remains a bright spot, adding 13,000 jobs,” said ABC Chief Economist Anirban Basu. “Nonresidential construction’s growth is impressive given March’s colder weather, but it represents a slowing from the first two months of the year, when the sector averaged 29,100 net new jobs created per month.
“Total construction employment, hurt by job losses in the residential sector, also slowed in March from an average of 46,500 jobs per month in the first two months of 2017. Year-over-year total construction employment continued to easily outpace the overall economy, increasing by 2.6 percent from March 2016 compared to the broader nonfarm payroll expansion of 1.5 percent, signifying the industry’s economic health.
“A number of nonresidential segments performed particularly well from the perspective of job creation,” said Basu. “These included specialty trade contractors, who remained busy working on commercial construction projects, and heavy and civil engineering, which suggests a pickup in highway and street spending.
“With the nation’s unemployment rate now at just 4.5 percent, there is little reason to believe that securing construction talent is set to become easier,” said Basu. “In fact, the skilled worker shortages already experienced by many contractors are likely to become more severe as the year proceeds. The average contractor can therefore anticipate sharper compensation cost increases, particularly as firms securing new work scramble to put together project teams.”
The construction industry unemployment rate, which is available only on a nonseasonally adjusted basis, fell by 0.4 percent in March and now stands at 8.4 percent. The national unemployment rate fell by 0.2 percent and now stands at 4.5 percent.
March 2017 Construction Employment
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Construction unemployment rates were down in 25 states and unchanged in four in February on a year-over-year basis, according to analysis released today by Associated Builders and Contractors (ABC). The national not seasonally adjusted (NSA) construction unemployment rate of 8.8 percent was up 0.1 percent from February 2016, according to data from the U.S. Bureau of Labor Statistics (BLS).
Since these industry-specific rates are not seasonally adjusted, the best approach is to evaluate the national and state-level unemployment rates on a year-over-year basis.
“Despite the slight downturn in the year-over-year NSA national construction unemployment rate, half the states had a reduction in their rates from a year ago,” said Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Overall, the construction sector remains healthy even as employers struggle against the headwind of mounting shortages of skilled construction workers.”
In spite of the year-over-year rise, this was the second lowest national February NSA construction unemployment rate since February 2006 when the rate was 8.6 percent. Meanwhile, BLS data showed that the industry employed 219,000 more workers than in February 2016.
The general pattern in the movement in the national NSA construction unemployment rate from January to February is an increase. Starting in 2000, when the BLS data for this series begins, through 2016, the February rate has risen 11 times, fallen five times and been unchanged once. Contrary to the normal pattern due to the unusually mild weather in much of the nation in February, this year there was a 0.6 percent rate drop in the NSA rate from January.
View states ranked by their construction unemployment rate, their year-over-year improvement in construction unemployment, their monthly improvement in construction unemployment, a regional breakdown of states’ construction unemployment rates and their February unemployment rates for all industries.
The Top Five States
The states with the lowest estimated NSA construction unemployment rates in order from lowest rate to highest were:
3. Hawaii and Idaho (tie)
Three states—Colorado, Hawaii and Utah—were also among the top five in January. Utah had the lowest NSA construction unemployment rate (5.3 percent), an improvement from the fourth lowest rate in January, and was one of 36 states whose rate decreased from January, along with the national rate. Colorado had the second lowest industry rate in February and its 5.8 percent tied with 2007 for the state’s third lowest estimated February rate, behind 5.5 percent in 2006 and 5.4 percent in 2016.
Hawaii and Idaho, both with a 5.9 percent rate, had the third lowest rate in February. Hawaii dropped from lowest rate in January, despite its industry unemployment rate, which also includes mining and logging, dropping from 6 percent in January. For Idaho, it was the state’s second lowest estimated February rate since the beginning of the estimates in 2000, second only to last year’s 5.6 percent.
Nebraska jumped from the 20th lowest rate in January to the fourth lowest in February with a 6 percent construction unemployment rate.
The Bottom Five States
The states with the highest estimated NSA construction unemployment rates in order from lowest to highest rates were:
47. West Virginia
48. New Mexico
49. Rhode Island
Three of these states—Alaska, Rhode Island and West Virginia—were also among the five states with the highest construction unemployment rates in January.
As in the previous five months, Alaska had the highest estimated NSA construction unemployment rate in February, 16.6 percent. It is normal for Alaska to have among the highest rates in the nation around this time of year since these are NSA construction unemployment rates. The state did see the biggest improvement from January (5.8 percent improvement) and fourth best year-over-year improvement (2.1 percent).
Rhode Island posted its lowest February construction unemployment rate since 2007, but still had the second highest construction unemployment rate in February (16.4 percent). New Mexico had the third highest estimated NSA construction unemployment rate in February (15 percent) and the largest year-over-year and monthly increases, up 2.6 percent and 1.2 percent, respectively.
West Virginia had the fourth highest rate in February (13.6 percent), but also posted the largest year-over-year decrease in its rate and the sixth largest decrease from January (both down 2.6 percent). It was also the state’s lowest February rate since the beginning of estimated construction unemployment rates in 2000.
Pennsylvania had the fifth highest construction unemployment rate in February (13.1 percent), but matched 2008 and 2016 for its lowest February rate since 2006 (9.7 percent).
Illinois, which had the fourth highest construction unemployment rate in January, had the eighth highest rate in February, 12.3 percent. The state had the sixth largest year-over-year decrease in its rate, down 1.8 percent, and the third largest decrease from the previous month, along with Montana, down 3.8 percent.
To better understand the basis for calculating unemployment rates and what they measure, see the article Background on State Construction Unemployment Rates.
Nonresidential construction spending remained unchanged in February, according to analysis of U.S. Census Bureau data released today by Associated Builders and Contractors (ABC). The segment totaled $701.9 billion on a seasonally adjusted annualized rate for the month, marking the seventh consecutive month in which nonresidential spending sat above the $700 billion threshold.
Private nonresidential construction spending faltered in February, with six of the 11 subsectors experiencing a month-over-month spending decrease. The communication category experienced a particularly precipitous decline, falling 8.1 percent for the month. Public nonresidential spending increased for the first time since October of 2016.
“Today’s construction spending report essentially left the status quo unchanged,” said ABC Chief Economist Anirban Basu. “Recent ABC construction confidence surveys indicate roughly flat spending expected over the next six months. Today’s report was consistent with those expectations.
“Many construction firm leaders expect that ultimately, nonresidential construction spending will begin to climb as the new administration in Washington begins to implement its pro-business agenda,” said Basu. “That said, there is an awareness that the impact of proposed pro-business policies will not be immediate and may actually not be felt in earnest until 2018 or even 2019.
“Even in the absence of policy impacts, there has been a general improvement in overall business confidence in America,” said Basu. “This should translate into better construction spending performance over the months ahead, particularly in privately financed categories.”
February 2017 Nonresidential Construction Spending
Associated Builders and Contractors Praises President Trump for Eliminating Illegal Obama Blacklisting Rule
Associated Builders and Contractors (ABC) Recently (March 27, 2017) commended President Trump for signing a resolution into law effectively eliminating the Obama administration’s illegal “blacklisting” rule (formally known as the Fair Pay and Safe Workplaces final rule). Implementation of most of the rule’s onerous and duplicative reporting and disclosure requirements were temporarily blocked on Oct. 24 when a U.S. District Court judge ruled in favor of ABC’s lawsuit and granted a preliminary injunction.
“Associated Builders and Contractors has opposed the illegal blacklisting rule from the day it was first proposed as an executive order by President Obama,” said ABC Vice President of Regulatory, Labor and State Affairs Ben Brubeck. “The rule violated the due process rights of contractors by forcing them to report mere allegations of misconduct—which are often frivolous and filed with nefarious intentions by special interest groups—the same as fully adjudicated violations.
“Additionally, the cumbersome and duplicative requirements of the rule, most of which were temporarily blocked when a U.S. District Court judge ruled in favor of ABC’s lawsuit and granted a preliminary injunction, would have driven up the cost of public construction projects to taxpayers and served as a costly barrier to entry for small businesses. ABC is committed to working with the Trump administration and Congress to improve the government’s current procurement system to ensure that taxpayer-funded projects are awarded through a transparent and fair bid process that encourages competition from all qualified contractors.”
The CRA measure was introduced by House Committee on Education and the Workforce Chair Virginia Foxx (R-N.C.), House Small Business Committee Chair Steve Chabot (R-Ohio) and House Committee on Oversight and Government Reform Chair Jason Chaffetz (R-Utah).
To read more about ABC’s opposition to the blacklisting rule, visit abc.org/blacklisting.
Associated Builders and Contractors (ABC) recently released its 2017 Safety Performance Report to further the construction industry’s understanding of how to make jobsites safer through its Safety Performance Evaluation Process (STEP). Packed with infographics and practical takeaways, the report documents the dramatic impact of using proactive safety practices to reduce recordable incidents by up to 87 percent, making the best-performing companies 770 percent safer than the industry average.
“ABC’s third annual report on the use of leading indicators, such as substance abuse programs and new hire safety orientations, confirms that high-performing ABC members have safer construction jobsites,” said ABC President and CEO Michael Bellaman. “This is one of the few studies of commercial and industrial construction firms doing real work on real projects, and it shows that implementing best practices can produce world-class construction safety programs.”
The Safety Performance Report is based on data gathered from ABC member companies recording more than one billion hours of work in construction, heavy construction, civil engineering and specialty trades. It tracked 35 data points from ABC’s 2016 STEP participants to determine the correlation between implementing leading indicator use and lagging indicator performance, which is measured by the Total Recordable Incident Rate (TRIR) and Days Away and Restricted or Transferred (DART) rate. Each of the data points collected was sorted using statistically valid methodology developed by the U.S. Bureau of Labor Statistics (BLS) for its annual Occupational Injuries and Illnesses Survey, and combined to produce analyses of STEP participant performance against BLS industry average incidence rates.
Among the findings:
Companies that attained the highest level of STEP participation—Diamond—reduced their TRIR by 87 percent compared to the BLS industry average of 3.5 injuries/fatalities per 100 full-time employees.
STEP participants with a robust substance abuse program/policy in place dramatically outperformed those with a weaker program, reducing their TRIR and DART rates by 36 percent.
Conducting a new hire safety orientation lasting more than 200 minutes reduced incident rates by 94 percent compared to an orientation of 30 minutes.
Companies that held site-specific safety orientations reduced their TRIR by 45 percent.
Holding daily toolbox talks (brief, single-topic training sessions conducted on the jobsite for all employees) reduced TRIR by 64 percent, versus holding them monthly.
Firms that scored high for C-suite leadership engagement and employee participation reduced their TRIR by 54 percent and 63 percent, respectively.
STEP was founded in 1989 by the ABC National Environment, Health & Safety Committee as a safety benchmarking and improvement tool. Participating ABC member firms measure their safety processes and policies on 20 key components through a detailed questionnaire with the goal of implementing or enhancing safety programs that reduce jobsite incidence rates. Applying world-class processes dramatically improves safety performance among participants regardless of company size or type of work.
The full report is available on ABC’s website.
Associated Builders and Contractors (ABC) is a national construction industry trade association established in 1950 that represents nearly 21,000 members. Founded on the merit shop philosophy, ABC and its 70 chapters help members develop people, win work and deliver that work safely, ethically and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org.