The Daily Dig
Construction employment grew by 22,000 jobs in July, according to an Associated Builders and Contractors analysis of Bureau of Labor Statistics data released August 7. The industry has added 82,000 jobs over the past year, a gain of 1.0%. Nonresidential construction accounted for 20,000 of the July gains, with every subcategory posting growth.
Specialty trade contractors drove most of that expansion, adding 15,400 positions. Nonresidential building added 4,200 jobs, and heavy and civil engineering added 400. ABC Chief Economist Anirban Basu tied the specialty trade growth to the ongoing data center construction boom, which continues to pull demand toward contractors in that space.
The construction unemployment rate came in at 3.7% for July, below the broader unemployment rate of 4.1%. That national rate is 0.2 percentage points lower than a year ago. The broader economy, meanwhile, posted an unexpected net job loss in July, its first since February.
Basu also pointed to significant downward revisions to the two prior months of jobs data, calling it a sign of emerging weakness in the labor market. He noted that if that softness continues, it could benefit construction through lower borrowing costs, citing a sharp drop in treasury yields immediately after the report's release.
Snapshot:
Report: Associated Builders and Contractors analysis of BLS employment data
Release Date: August 7
Total Construction Jobs Added (July): 22,000
Year-Over-Year Construction Job Growth: 82,000 jobs (1.0%)
Nonresidential Construction Jobs Added: 20,000
Nonresidential Specialty Trade Jobs Added: 15,400
Nonresidential Building Jobs Added: 4,200
Heavy and Civil Engineering Jobs Added: 400
Construction Unemployment Rate (July): 3.7%
Economywide Unemployment Rate: 4.1% (down 0.2 points year over year)
Key Demand Driver (Specialty Trade Hiring): Data center construction investment
TheJobWalk Thoughts
Specialty trade added more jobs in July than nonresidential building and heavy civil combined, 15,400 versus 4,600. Basu ties that growth directly to the data center construction boom, which signals where hiring demand is concentrated right now. Specialty trade firms already active in that space are the ones seeing the direct benefit of this demand.
Construction's unemployment rate sits below the national average even as the broader economy shows signs of cooling. That gap suggests contractor demand in this sector has held up better than the general labor market, a signal worth watching as other industries slow down.
Basu linked broader labor market softness to the drop in treasury yields following the report. If that trend continues, borrowing costs could ease for owners and developers evaluating new starts, which is a financing signal worth tracking for anyone with projects in the pipeline.
Courtesy of Associated Builders and Contractors
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