California Construction News staff writer
The construction industry added 25,000 jobs in July, according to an analysis by the Associated Builders and Contractors (ABC) of data released by the U.S. Bureau of Labor Statistics.
Nonresidential construction was a significant contributor, adding 16,200 jobs across its three subcategories. Nonresidential specialty trade contractors led this growth with 11,300 new positions, followed by heavy and civil engineering with 2,900 jobs, and nonresidential building with 2,000 jobs.
Despite this growth, the construction unemployment rate climbed to 3.9% in July. Overall unemployment also increased from 4.1% in June to 4.3% last month.
“Although economists have been predicting a downturn for over two years, the recent economic slowdown feels more pronounced,” said ABC Chief Economist Anirban Basu, suggesting that the U.S. may be heading into a recession. “Unemployment is rising quickly, consumer spending is slowing, and U.S. equity markets are experiencing significant losses.
“This indicates a growing belief that the Federal Reserve has been slow to reduce interest rates.”
Historically, nonresidential construction activity tends to lag behind the overall economy by 12 to 18 months.
The ABC’s Construction Confidence Index shows contractors remain optimistic about the next six months, however, if the economic downturn continues, contractor confidence is likely to drop. Data from June’s construction spending report, released August 1, suggest that many segments are already slowing down.
However, construction related to manufacturing has seen the fastest growth, driven by substantial investments in chip-making facilities and other industrial projects, partly funded by federal subsidies. Sectors not receiving subsidies may face significant declines in performance if the economy continues to weaken and borrowing costs remain high.
For more details, including the Construction Backlog Indicator and Construction Confidence Index, as well as analysis of spending, employment, job openings, and the Producer Price Index, visit abc.org/economics.
