Construction Employment Increases

Demand for Projects Grows in Metro Areas

by the Associated General Contractors of America

Construction employment rose in 234, or 65%, of 358 metro areas between March 2023 and March 2024, according to an analysis by the Associated General Contractors of America of new government employment data.  Association officials noted that demand for a range of projects, from infrastructure to manufacturing and data centers, continues to grow in many parts of the country even as firms struggle to find enough workers.

         “While high interest rates and post-COVID work patterns are reducing demand for certain types of projects, the overall construction market remains strong and many firms are still expanding their payrolls,” said Ken Simonson, the association’s Chief Economist.  “But most firms are struggling to find enough workers as the number of qualified, available workers remains insufficient to satisfy the demand.”

         Riverside-San Bernardino-Ontario, California, and Baton Rouge, Louisiana, added the most construction jobs, 6,200 jobs each or 6% and 13%, respectively, between March 2023 and March 2024.  Other metro areas with large numerical increases include Fort Worth-Arlington, Texas, 5,700 jobs, 7%, Phoenix-Mesa-Scottsdale, Arizona, 5,200, jobs, 3%, and Detroit-Dearborn-Livonia, Michigan, 5,000 jobs, 22%.  The largest percentage gain, 27%, occurred in Fairbanks, Alaska, which added 600 jobs.  The pickup in Fairbanks was followed by Redding, California, 24%, 900 jobs, Anchorage, Alaska, 20%, 1,800 jobs, Danville, Illinois, 20%, 100 jobs, and Lawton, Oklahoma, 20%, 300 jobs.

         Construction employment declined over the year in 81 metro areas and was unchanged in 43 areas.  The largest job loss occurred in New York City, -7,500 jobs, -5%, followed by Minneapolis to St. Paul-Bloomington, Wisconsin, -5,700 jobs, -7%, Denver-Aurora-Lakewood, Colorado, -5,600 jobs, -5%, Portland-Vancouver-Hillsboro, Oregon-Washington, -4,600 jobs, -6%, and Seattle-Bellevue-Everett, Washington, -4,500 jobs, -4%.  The largest percentage decrease occurred in Decatur, Illinois, -26%, -1,000 jobs, followed by Augusta-Richmond County, Georgia-South Carolina, -14%, -2,300 jobs, Lake Charles, Louisiana, -11%, -1,300 jobs, and Bellingham, Washington, -11%, -1,000 jobs.

         Association officials noted that some construction firms are choosing not to bid on projects because they lack sufficient staff to fulfill the work.  They warned this will limit competition for vital new infrastructure and economic development projects.  They urged Congress and the Biden administration to boost funding for construction education and training programs and to implement reforms to the immigration system.

         “Policy makers spent decades dismantling once-robust construction education programs, so even if Congress acts soon, it is going to take time to reinvigorate them,” said Jeffrey D. Shoaf, the association’s Chief Executive Officer.  “In the meantime, sensible immigration reform measures can allow more people to lawfully enter the country to work in construction and achieve the American dream.”

         Total construction spending dipped from February to March with declines in private nonresidential and residential projects that offset a rebound in public construction, according to an analysis of a new government report that the Associated General Contractors of America released.  Association officials noted, however, that contractors continue to report robust backlogs and few cancellations, suggesting that the slowdown in spending may be due to a lack of workers, not slumping demand.

         “Private nonresidential categories showed varied patterns, while multifamily construction continued to slip from record levels in 2023,” said Simonson.  “Meanwhile, public construction posted healthy gains for the month and year-over-year.  These diverse trends suggest there is still strong demand for projects, but a dearth of workers may be forcing a slowdown in spending.”

         Construction spending, not adjusted for inflation, totaled $2.084 trillion at a seasonally adjusted annual rate in March.  That figure is 0.2% below the downwardly revised February rate, but 9.6% above the March 2023 level.

         Spending on private nonresidential and residential projects both declined in March but rose year-over-year.  Nonresidential construction slipped 0.2% for the month but rose 11.1% from March 2023.  The largest private segment, manufacturing construction, climbed 0.1% and 25.8%, respectively.  Commercial construction fell 0.6% in March but ticked up 1.3% over 12 months.  Investment in power, oil, and gas projects slumped 0.9% in March but rose 6.0% year-over-year.  Spending on private residential construction fell 0.7% for the month but grew 4.4% year-over-year.  Single-family construction fell 0.2% after ten monthly gains in a row but rose 18.3% year-over-year.  Multifamily spending fell 0.6% in March but climbed 3.5% from March 2023.

         Public construction spending increased 0.8% for the month and 17.9% from a year earlier.  The largest public segment, highway and street construction, climbed by 0.9% in March and 19.9% over 12 months.  Public educational spending rose 1.0% and 16.7%, respectively.

         Association officials said the strong gains in public construction were good for the industry and the economy, but they also noted that worker shortages are likely making for longer project completion times and holding down monthly spending on private projects.  They urged federal, state, and local officials to hike funding for construction education and training programs to enable more people to acquire skills needed for construction careers.  They continued to push federal officials for measures to allow more people to lawfully enter the country and work in construction.

         “Continuing economic growth requires investments in infrastructure, manufacturing, and energy projects,” said Shoaf.  “Investing in new construction education and training programs and enacting some common-sense immigration reforms is essential for ensuring the nation has enough workers with the skills to build these and other vitally needed projects.”