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Construction employment was uninterrupted from May to June, but an increase in hourly pay and longer weeks, along with shrinking numbers of unemployed construction workers, suggest contractors would hire more people if they were available.
According to an analysis by the Associated General Contractors of America (AGC), the lack of available qualified workers for firms to hire appears to be holding back employment growth. The association is urging Congress to pass a bill to reform the Carl D. Perkins Act to increase funding for career and technical education programs, which will correct the problem.
“We are at the point now where the lack of qualified workers is holding many construction firms back from expanding headcounts,” said Stephen E. Sandherr, chief executive officer of AGC. “It is time for Congress to pass a legislation that will help reinvigorate the pipeline for recruiting and preparing students for high-paying careers in construction.”
Ken Simonson, AGC chief economist, said construction employment stalled in June after declining in April and May, but unemployment among construction workers is at a 16-year low, while average hourly earnings have accelerated for the past three months and average weekly hours are very high.
“These indicators, along with reports from contractors, suggest there is a dearth of qualified workers to hire, and not a deliberate pullback in hiring,” Simonson said. “Indeed, construction activity and employment should continue to outpace the overall economy in the remainder of 2016.”
Construction employment totaled 6.5 million in June, matching the level in May. Industry employment dipped by 6000 in April and 16,000 in May. Despite the decreases, employment in the sector increased by 3.4 percent over the past year, compared to 1.7 percent for total non-farm payroll employment.
Average hourly earnings, measure of wages and salaries for all workers, increased 2.8 percent in the industry over the past year to $28.13 in June. Simonson said both earnings and average weekly hours for all workers have increased in the past three months, even as employment tapered off. He noted the 417,000 unemployed job-seekers in June who last worked and the 4.6 percent unemployment rate for those individuals, were the lowest June levels since 2000.
Nonresidential construction in particular lost 1500 jobs for the month, but gained 83,000 employees compared to June 2015, representing a 2.1 percent rise.
Maybe it is time for the Unions to invigorate their training and apprenticeship programs instead of expecting the congress to do this work for their industry.