Construction firms added 24,000 employees in February, as hefty pay raises for hourly workers enabled the industry to increase employment more steeply than other sectors, according to an analysis by the Associated General Contractors of America of new government data. Association officials said that while employment levels are now at record levels in the industry, future job gains will be hard given the lack of people who have been exposed to construction career opportunities.
“Average hourly earnings for craft and office workers in construction have consistently risen more sharply than across the private sector as a whole for several months,” said Ken Simonson, the association’s chief economist. “That has helped the industry add employees at a strong clip—but many more are still needed.”
Construction employment totaled a record 7,918,000, seasonally adjusted, in February, an increase of 249,000, or 3.2 percent, from a year earlier. That growth rate exceeded the 2.9 percent rise in total nonfarm employment.
Nonresidential firms—comprising nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—added 11,600 employees in February and 158,700 employees, or 3.5 percent, over 12 months. Residential building and specialty trade contractors together added 12,400 employees for the month and 90,300 employees, or 2.8 percent, over the year.
Pay levels in the construction industry climbed in February at a faster pace than in the overall private sector for the sixth straight month. Average hourly earnings for production and nonsupervisory workers in construction—mostly hourly craft workers—rose by 6.1 percent, from $31.63 in February 2022 to $33.57 in February 2023. That increase topped the 5.3 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 overall private sector.
Association officials said that while firms have had success recruiting workers by offering higher pay levels, the pool of qualified workers remains tight. They noted that relatively few new workers are exposed to construction while in school, which is a consequence of meager federal funding for career and technical education. They urged the Biden administration to boost funding for construction education programs.
“Construction firms are doing everything they can to bring in new workers to keep pace with demand,” said Stephen E. Sandherr, the association’s chief executive officer. “But it is hard to recruit workers who have never been exposed to the industry and don’t appreciate the amazing pay, benefits and satisfaction that comes with a career in construction.”