Jobs Report: Nonresidential Construction Remains Hot

Wed July 25, 2007 - National Edition
Construction Equipment Guide

“Today’s employment report shows that nonresidential construction is still a potent job creator,” Ken Simonson, chief economist of The Associated General Contractors of America (AGC), said. Simonson was commenting on the June 1 payroll employment report from the Bureau of Labor Statistics (BLS).

“Seasonally adjusted total construction employment was flat in May and down by 21,000 or 0.4 percent compared to May 2006,” Simonson remarked. “But that masks divergent trends in nonresidential and residential construction.

“Over the past 12 months, employment in the three nonresidential categories — nonresidential building, specialty trades, plus heavy and civil engineering — climbed 2.4 percent, considerably faster than the 1.4 percent gain in overall nonfarm payroll employment,” Simonson commented. “That nearly offset the 3.9 percent drop in residential building and specialty trades employment.

“The actual difference is most likely even starker,” Simonson added. “I’ve been hearing that many subcontractors that formerly concentrated on residential work are now doing commercial construction, but their companies are probably still counted as being in the residential specialty trade industry.

“The report contains more good news for nonresidential construction in that architectural and engineering services firms are hiring workers at an even more rapid clip,” Simonson noted. “Their employment rose 3.8 percent in the past 12 months. Their output will turn into construction jobs in the next several months.

“Despite the layoffs in home building, many nonresidential contractors are having difficulty finding workers with the right skill mix,” Simonson concluded. “That is one reason hourly earnings in construction went up 5.1 percent in the past 12 months, much faster than the 3.8 percent increase in hourly earnings for all private-sector production and nonsupervisory workers.”

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