Construction added 25,000 jobs in January, putting employment growth for the industry at 3.8%. RSM US Construction and Real Estate Senior Analyst Nick Grandy is discussing today’s data and what’s ahead for the industry:
- On a non-seasonally adjusted basis, the construction unemployment rate jumped to 6.9% in January. This is not unusual for the month due to weather playing a factor in the ability to construct on certain projects.
- Year-over-year construction wage growth declined again, dropping to 5.49% despite a 0.42% monthly increase in January.
- Residential and nonresidential employment, excluding specialty contractors, were both flat on the month. Contractors have noted higher backlogs in recent months, with the latest estimate coming in at 9.2 months of backlog for December 2022.
- Heavy and civil fell on the month, however they have produced a modest gain on the year with a 3.3% increase in jobs from January 2022 to January 2023.
- Specialty contractors gained 21,900 jobs, with residential increasing by 5,400 and non-residential gaining 16,500.
- The slowdown in housing demand will hit contractors later in the year, once they have worked through built up backlog from supply chain challenges. Non-residential contractors should continue to see growth as backlogs linger at recent highs, before flattening and potentially turning negative due to recessionary pressures.