WASHINGTON, D.C. — The construction industry registered 449,000 job openings in April, according to an Associated Builders and Contractors (ABC) analysis of data from the U.S. Bureau of Labor Statistics’ Job Opening and Labor Turnover Survey (JOLTS). The JOLTS survey defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings increased by 23,000 last month and are up 120,000 from the same time last year.
According to ABC, the marketplace still favors employees as opposed to employers, with construction workers quitting their jobs at a faster rate than they were laid off or discharged in April. The quit rate was tracked at 2.9%, well above the layoff and discharge rate of 1.5%. This is the 14th consecutive month where quits outpaced layoffs and discharges.
“The desperate search for skilled construction workers persists,” said ABC Chief Economist Anirban Basu. “The number of available, unfilled construction jobs continues to expand. Remarkably, this is occurring despite a lack of strong construction spending growth, which suggests that construction productivity is not expanding. What is expanding is compensation costs, as employers compete aggressively with one another to secure sufficient levels of human capital."
Basu said the report also suggests that wage pressures are continuing to stoke economywide inflation. This will likely increase the chances the Federal Reserve will continue pursuing a "path of tightening monetary policy."
"Accordingly, contractors will face both rising delivery costs and cost of capital," Basu said. "Despite that, many contractors remain upbeat, according to ABC’s Construction Confidence Index, indicating that they are operating at capacity and expect to do so for the rest of the year.”
ABC’s Construction Confidence Index readings for sales, profit margins and staffing levels declined in May. The indices for sales and staffing remain above the threshold of 50, indicating expectations of growth over the next six months, while the reading for profit margins was exactly 50 for the month.
Part of that confidence may stem from the fact that ABC's Construction Backlog Indicator increased to nine months in May from 8.8 months in April, according to an ABC member survey conducted May 17 to June 3.
Backlog in the infrastructure segment jumped from 8.7 months in April to 9.3 months in May, and the Northeast and South regions continue to outperform the middle states and the West. Contractors with more than $100 million in annual revenues enjoyed the highest backlog, at 13.2 months.
“It is simply remarkable that contractors continue to add to backlog amidst global strife, rising materials prices and ubiquitous labor force challenges,” said Basu. “Backlog is up in every segment over the past year, including in the somewhat shaky commercial category. The largest increase in backlog has been registered in the industrial segment. More American companies are committing to place additional supply chain capacity in the United States, with Intel and Ford representing particularly recent and noteworthy examples."