After an accelerated pace of industry layoffs in March and April during the early stages of the coronavirus (COVID-19) pandemic, the construction sector has rebounded strongly and posted strong hiring numbers in both May and June, according to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS). According to the National Association of Home Builders' (NAHB) Eye on Housing blog, the rate of hiring reduced slightly from May to June, but generally remained strong.
In May, the hiring rate increased to 9.7%, after a subdued 3.7% rate in April. This was the strongest rate of hiring in the history of the JOLTS data. In June, the rate was 6.9%, slower than May but still well above average.
This pace of rehiring, combined with weakness in the nonresidential sector, reduced the open jobs rate to just 3.3% in June, with a 245,000 total of open construction sector jobs. The open job count was 325,000 a year ago. However, builders continue to cite limited access to skilled construction workers as a concern as they seek workers to undertake more home construction and remodeling.
The job openings rate is likely to experience choppiness in the months ahead given the divergent paths within the construction industry. Home building and remodeling are relative bright spots for the overall economy, while nonresidential construction will experience a period of weakness.
Despite data suggesting strong hiring in the construction industry, industry employment numbers are down when compared to the same period a year ago. According to the Associated General Contractors of America (AGC), construction decreased on a year-over-year (YOY) basis between June 2019 and June 2020 in 62% of 358 analyzed metropolitan statistical areas. These YOY employment decreases are in spite of strong growth during May and June, suggesting losses experienced during March and April have outpaced job recoveries. Additionally, the AGC projects that construction employment may soon decline again, as projects across the country continue to be canceled.Read More