Construction firms added 25,000 employees in January and raised wages for hourly workers more steeply than other sectors, according to an analysis by the Associated General Contractors of America of new government data. Association officials said the industry was benefitting from relatively strong demand for construction projects, as firms struggle to fill available positions in the sector.

“Construction employment and pay gains outpaced the economy as a whole in the past year, showing that demand for projects remains strong,” said Ken Simonson, the association’s chief economist. “In fact, most contractors would like to hire even more workers and are raising pay in an effort to attract them.”

Construction employment totaled a record 7,884,000, seasonally adjusted, in January, an increase of 294,000, or 3.9 percent, from a year earlier. That growth rate topped the 3.3 percent rise in total non-farm employment.

Nonresidential firms—comprising nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—added 19,300 employees in January and 179,200 employees, or 4 percent, over 12 months. Residential building and specialty trade contractors together added 5,500 employees for the month and 114,600 employees, or 3.6 percent, over the year.

Pay levels in the construction industry continued to increase in January 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 6.2 percent, from $31.44 in January 2022 to $33.38 last month. That increase exceeded the 5.1 percent rise in average pay for all private sector production workers. Workers in construction now earn an average of 18.1 percent more per hour than in the private sector as a whole.

Job openings in construction at the end of 2022 totaled 359,000, the highest December total in the 23-year history of the data. Simonson said that figure reinforced contractors’ reports that they are seeking far more workers than they have been able to hire, despite the industry’s large job gains over the past year.

Association officials said the industry likely would have added even more jobs if firms could find more people to hire, noting that 80 percent of firms in the association’s recent survey reported having a hard time finding qualified workers to hire. They urged federal officials to allow more people with construction skills to lawfully enter the country to work in the industry. And they urged federal officials to boost funding and support for all types of construction-focused education and training programs.

“Construction firms are doing everything in their power to recruit even more people into the industry,” said Stephen E. Sandherr, the association’s chief executive officer. “Closing a federal funding gap that puts $5 into college-track programs for every dollar spent on career and technical education will help expose many more workers to high-paying career opportunities in fields like construction.”