The Daily Dig
Construction job openings reached 305,000 on the last day of June. That's an increase of 14,000 from May, according to an Associated Builders and Contractors analysis of the U.S. Bureau of Labor Statistics' Job Openings and Labor Turnover Survey. Openings are now up 81,000 from the same time last year, a 36% year over year increase. JOLTS counts any unfilled position an employer is actively recruiting for as an opening.
ABC Chief Economist Anirban Basu said the numbers can be read more than one way and are often challenging to interpret. Rising openings could point to an industry actively expanding its workforce. Basu noted that ABC's Construction Confidence Indicator shows contractors expect both revenue and employment to grow over the next six months. But June's construction spending report shows overall residential and nonresidential spending continuing to decline, which complicates a simple growth story.
Basu offered two alternative, and explicitly speculative, explanations for the rise in openings. One centers on demographics. He said many highly experienced, productive workers are retiring, and it is conceivable they are being replaced with less skilled, less productive labor, meaning several new hires could be needed to cover the output of one departing veteran. The other points to documentation status. Basu said it may be that some workers previously on jobsites lacked proper documentation and are no longer available at those sites, which could be pushing contractors to hire faster and widening the number of open positions.
Basu was careful to frame both explanations as possibilities rather than conclusions. He said the JOLTS data may simply not be capturing everything that is happening in the labor market.
Snapshot:
Report: ABC analysis of BLS Job Openings and Labor Turnover Survey (JOLTS)
Publisher: Associated Builders and Contractors
Data Period: Last day of June
Construction Job Openings: 305,000
Monthly Change: Up 14,000 from May
Year Over Year Change: Up 81,000 (36%)
Spending Trend: Overall residential and nonresidential construction spending declining, per June construction spending report
Confidence Indicator: ABC's Construction Confidence Indicator shows contractors expect rising revenue and employment over the next six months
Economist Quoted: Anirban Basu, ABC Chief Economist
Possible Explanations Offered by Basu (Speculative): Retiring experienced workers being replaced by less skilled labor; workers previously without proper documentation no longer available at jobsites
TheJobWalk Thoughts
Basu is careful not to call this a clean signal, and that caution is worth sitting with. Rising openings next to falling spending does not confirm growth or confirm strain. It means GCs and subs should watch their own hiring cycles closely this quarter rather than assume the national trend explains what is happening on their jobsites.
The retirement theory is worth planning around even without confirmation. If contractors are quietly needing multiple hires to replace the output of one veteran, subs leaning on a small senior crew to train juniors have a real reason to firm up succession plans now rather than wait for proof in the data.
The documentation theory, if it holds even partially, matters most for staffing agencies and labor brokers working in regions with tighter enforcement activity. Contractors sourcing labor through those channels should treat workforce redundancy as a hedge worth building now, before a shortfall shows up mid-schedule.
Courtesy of ABC
