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By Anirban Basu
September 4, 2017
Oscillations month to month are likely statistical anomalies
According to data released Friday by the Bureau of Labor Statistics, the construction industry added 28,000 net new jobs in August (seasonally adjusted). This follows a disappointing July in which the industry lost 3,000 net jobs. From March to July, the nation’s industry added just 19,000 net jobs. August represents a meaningful departure from the pre-existing trend, but one should not make too much out of one month of data. Here’s why.
First, construction spending data, which were also released today, were not nearly as benign. According to those data, nonresidential construction spending actually fell in both June and July. This implies that hiring may slow during months to come. Moreover, both residential and nonresidential construction firms continue to report a dearth of employable workers. The lack of available skilled craftspeople will continue to suppress hiring.
Still, August was a good month. The nonresidential subsector added 14,300 net new jobs in August after losing 6,200 jobs in July. Construction industry employment fell two-tenths of a percentage point to four point seven percent. This inures to the benefit of workers, who can feel a bit more secure in their jobs. It also implies faster wage growth as construction firm operators continue to scramble for talent and invest more resources on retention.
Such dynamics do not inure to the benefit of firm profitability, however. The ongoing shortages in human capital supply also render it more challenging for firms to deliver construction services on-time and on-budget.
1-Month Net Change
12-Month Net Change
12-month % Change
Heavy & Civil Engineering
Residential Specialty Trade Contractors
Nonresidential Specialty Trade Contractors
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