June 10, 2014
The number of open, unfilled construction sector jobs continued to decline as housing construction softened during the first quarter.
According to the BLS Job Openings and Labor Turnover Survey (JOLTS), the number of open construction sector jobs declined on a seasonally adjusted basis from an upwardly revised count of 116,000 in March to 94,000 in April. This is the first month below 100,000 open positions in construction since April of 2013. Winter conditions and other factors slowed the growth of home construction in recent months, and this likely reduced the number of jobs offered by builders and remodelers.
On a three-month moving average basis, the open position rate for the construction sector fell to 1.83% for the month of April, continuing a decline begun in December. While the open rate has declined somewhat in recent months, the rate of open jobs in construction remains above any rate witnessed after the recession and prior to 2013.
Monthly gross hiring in construction increased somewhat, rising on a seasonally adjusted basis from 257,000 to 278,000 from March to April. Over the same period, the hiring rate, as measured on a 3-month moving average basis, was effectively unchanged at 4.6% for April.
Two trends in the construction sector are worth noting. First, the layoff rate for the sector (graphed above as a 12-month moving average) has continued to fall. Second, the sector hiring rate has fallen noticeably since the fall of 2013. The trend lines over the last two years – a falling hiring rate, an elevated open rate, and a declining layoff rate – are consistent with some construction firms having trouble contracting with workers for specific projects.
It is also worth noting that, on a seasonally adjusted basis, the construction sector unemployment rate stands at 8.9% for May, down from 11.2% a year ago. Construction sector unemployment peaked at 22% (seasonally adjusted basis) in February 2010.
Monthly employment data for May 2014 (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 2.259 million, broken down as 656,000 builders and 1.602 million residential specialty trade contractors.
Over the last year the home building sector has added 106,000 jobs. Since the point of peak decline of home building employment, when total job losses for the industry stood at 1.466 million, 274,800 positions have been added to the residential construction sector. As of May, over the last six months the home building and remodeling industry has added on average more than 8,000 jobs per month.
For the economy as a whole, the March JOLTS data indicate that the hiring rate was constant at 3.4% of total employment. The hiring rate has been in the 3.1% to 3.4% range since January 2011. The overall job openings rate (3.1%) ticked up out of the 2.7% to 2.9% range it has been in since the start of 2013. This may represent good news for future job creation after a tough winter.
* NAHB Eye on Housing – Posted by Robert Dietz