TWIA Commercial Property & Casualty
Open construction jobs plunge 40%, but economists question data
May
Dive Brief:
- The number of construction job openings dropped by 39.9% from a month earlier to 274,000 on the last day of March, according to the Bureau of Labor Statistics. The data measures the number of open positions for which contractors are actively hiring.
- March 2023 also saw a low number of job openings at 291,000, about a 6% drop year over year. In 2024, March ended with 3.2% of all jobs unfilled, compared to 3.5% in 2023.
- Although the March 2024 number was the lowest since October 2020, per Associated Builders and Contractors Chief Economist Anirban Basu, experts say that the drop isn’t a cause for immediate concern, as a number of factors could have contributed to the dip.
Dive Insight:
Ken Simson, chief economist of the Associated General Contractors of America, told Construction Dive the “ostensible weakness is likely to disappear soon.” Basu said the “dismal number likely reflects a statistical aberration rather than a legitimate decline in demand.”
For one, the drop aligns with a notable decrease in March 2023. That led Basu to question whether BLS’s seasonally adjusted metrics fully account for construction’s scheduling and hiring patterns.
“Accordingly, these data should not be viewed as a sign of an industry slowdown, at least not without another month or two of data to corroborate it,” said Basu.
Meanwhile, single-family construction spending dropped 0.2% at a seasonally adjusted rate after 10 consecutive months of increases, Simsonson noted. Spending on residential improvements dropped 1.6% for the fifth straight month and weakness in multifamily spending could have dragged down demand for workers in those sectors, which are included in the BLS report, Simonson said.
Finally, the number of layoffs in construction dropped 30.2% from February to March, to 145,000, which Simonson surmised to mean the industry expects continued demand for workers and kept them on, even with a decline in March work.
BLS does not break down construction job openings data by sector.
“I think the drop in hires and openings was probably concentrated in residential categories,” Simonson said.
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