Construction firms added 28,000 employees in December and continued to raise wages for hourly workers more than other sectors, as the industry’s unemployment rate fell to a record low for the month, according to an analysis by the Associated General Contractors of America of new government data. Association officials said the data align with their newly released survey, which found the majority of contractors are optimistic about demand for most construction types, despite reporting difficulty filling positions.

“There are more people working in construction today than ever before, and those figures are likely to continue to increase,” said Ken Simonson, the association’s chief economist. “But as optimistic as contractors are about 2023, they remain worried about their ability find enough workers amid record-low unemployment.”

Construction employment totaled a record 7,777,000, seasonally adjusted, in December, an increase of 231,000, or 3.1 percent, from a year earlier. Nonresidential firms—comprising nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—added 17,900 employees in December. Residential building and specialty trade contractors together added 9,500 employees.

Pay levels in the construction industry continued to increase in December at a faster pace than in the overall private sector. Average hourly earnings for production and nonsupervisory workers in construction—mostly hourly craft workers—climbed by 6.1 percent, from $31.25 in December 2021 to $33.15 last month. That increase exceeded the 5 percent rise in average pay for all private sector production workers. Such workers in construction now earn an average of 18.1 percent more per hour than in the private sector as a whole.

The unemployment rate among job seekers with construction experience declined from 5 percent in December 2021 to 4.4 percent last month, while the number of unemployed construction workers fell by 11 percent, from 497,000 in December 2021 to 443,000. Last month’s figures were the lowest ever for December.

Simonson noted that the association’s 2023 Construction Hiring & Business Outlook survey, conducted with Sage, found 69 percent of the more than 1,000 responding construction firms expect to increase their headcount in 2023, compared to 11 percent that expect a decrease. However, 80 percent of firms report having a hard time filling positions, compared to only 8 percent that report no difficulty.

Association officials urged Congress and the Biden administration to work on immigration reform measures that will allow more people with construction experience to legally enter the country and work in the sector. They also urged officials to close a federal funding gap that currently invests $5 in students planning to attend college for every dollar it invests in preparing students for high-paying careers in sectors like construction.

“Considering where federal officials put their money, it is no surprise that contractors are having a hard time finding workers to hire,” said Stephen E. Sandherr, the association’s chief executive officer. “As much as they talk about rebuilding our economy, federal officials still don’t seem ready to invest in the people needed to do all that building.”