The number of unfilled construction sector positions (124,000) reached a five-year high according to the October BLS Job Openings and Labor Turnover Survey (JOLTS).
While the increase in unfilled positions in 2013 is consistent with the increase in construction sector activity, particularly for home building, the data continue to reflect only modest growth in total employment thus far. The rise in the count of open positions is thus consistent with reports of local labor shortages.
For the construction sector, monthly gross hiring ticked up, rising from 299,000 to 307,000 from September to October. The hiring rate, as measured on a 3-month moving average basis, was unchanged at 5.2%. The pace of construction hiring has slowed since the end of 2012, and this trend has continued into the fall of 2013.
Consistent with reports of some labor shortages for builders, the number of open, unfilled positions in the construction industry reached a five-year high. The total of unfilled positions in the sector for October (124,000) marks eight out of the last ten months for which this number has equaled or exceeded 100,000. Successfully filling open positions with qualified workers is a top concern for home builders in 2013.
The October job openings rate (open positions measured as a percentage of current employment) for construction was 2.1%. Measured as a three-month moving average, the openings rate (the blue line above) has staged a noticeable rise since September 2012, although the growth in the open rate has slowed since February. This rise occurred at the same time as the hiring rate began to fall.
Combined with a declining sector layoff rate (non-seasonally adjusted), charted as a 12-month moving average in the graph above, the uptick in open positions since 2012 suggests more, if modest, construction hiring in the months ahead – if firms can find workers with the right skills. However, the recent soft patch in some construction activity may also reduce the pace of hiring. The data for November will reveal if job openings for the construction sector will fall.
Monthly employment data for November 2013 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that total employment in home building stands at 2.167 million, broken down as 596,000 builders and 1.571 million residential specialty trade contractors.
According to the BLS data, over the last 12 months, the home building sector has added 90,000 jobs. Since the point of peak decline of home building employment, when total job losses for the industry stood at 1.467 million, 184,000 positions have been added to the residential construction sector. Thus far in 2013, home building employment is averaging monthly net growth of about 8,200 positions.
For the economy as a whole, the October JOLTS data indicate that the hiring rate was relatively unchanged at 3.3% of total employment. The hiring rate has been in the 3.1% to 3.4% range since January 2011. The job openings rate was unchanged at 2.8%, which matches the highest such rate since 2008.
Posted by Robert Dietz, NAHB Eye on Housing