Construction job openings rise as hiring stalls
The construction industry added 25,000 jobs on net in May, according to an Associated Builders and Contractors analysis of data released today by the U.S. Bureau of Labor Statistics.
On a year-over-year basis, industry employment increased by 192,000 jobs and 2.5%.
But the construction job openings rate increased from 3.8% in March to 4.6% in April, according to the National Association of Home Builders (NAHB).
Total open construction jobs ascended from a revised reading of 315,000 in March to 383,000 in April. This arrives following a high of 488,000 open construction jobs in December 2022.
According to NAHB Chief Economist Robert Dietz, the recent trend of the estimates points to the construction labor market having peaked in 2022. The market is also now entering a “stop-start cooling stage” as the housing market adjusts to higher interest rates.
“While higher interest rates are having an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing worker demand, but by recruiting, training and retaining skilled workers,” Dietz wrote in a recent NAHB Eye on Housing blog post.
Total residential construction employment was nearly flat in May as the industry added just 2,500 jobs compared to the prior month. Residential construction jobs were at a total of about 3.261 million in May in comparison to 3.258 million in April.
On a year-over-year basis, residential construction hiring increased by a rate of 1.2% as 39,000 jobs were added.
Residential building jobs were nearly flat in May, totaling 932,600 in May from 930,200 in April. Residential special trade contractor positions also saw almost no movement with a total of 2.328 million in May.
While the construction unemployment rate dropped to 3.5% in May, unemployment across all industries increased from 3.4% in April to 3.7% last month.
A picture of the economy and current job market isn’t completely clear, however.
“Based on recent data, simply determining what is happening right now in the economy is difficult,” said ABC Chief Economist Anirban Basu. “While the establishment survey indicates that the nation added 339,000 jobs in May, smashing through consensus expectations, the household survey indicates that America lost 310,000 jobs for the month.”
“Since economists generally place far more emphasis on the establishment survey, today’s data will generally be viewed as further indication of ongoing economic momentum,” Basu added.
While higher interest rates are harming the U.S. economy, increasing mortgage rates continue to impact home sales, housing supply, and home prices.
On May 31, the average rate on a 30-year fixed mortgage hit 7.24% compared to 7.20% a week ago. This is the highest level in six months.
