The construction industry added 19,000 jobs in July even as the sector’s unemployment rate increased, according to an analysis of new government data the Associated General Contractors of America released Aug. 4. Association officials noted that tight labor conditions are bringing more previously employed construction workers back into the job market as firms continue to boost pay levels.

“The construction industry continues to add workers at a steady clip as demand for many types of construction remains strong,” said Stephen E. Sandherr, the association’s chief executive officer. “Firms are boosting pay to cope with tight labor market conditions, which is bringing more former workers back into the job market.”

Construction employment in July totaled 7,971,000, seasonally adjusted, an addition of 19,000 compared to June. The sector has added 198,000 jobs, or 2.5 percent, during the past 12 months. Nonresidential construction firms — nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms — added 10,600 employees, or 3.1 percent, in July. Meanwhile, employment at residential building and specialty trade contractors grew by 7,800, or 1.8 percent.

The unemployment rate among job seekers with construction experience rose from 3.5 percent in July 2022 to a still-low 3.9 percent. A separate government release earlier in August reported there were 378,000 openings at construction firms on the last day of June, close to the record-high for June set in 2022 and indicating that demand for workers remains strong.

Average hourly earnings for production and nonsupervisory employees in construction — covering most on-site craft workers as well as many office workers — jumped by 5.8 percent over the year to $34.24 per hour. Construction firms in July provided a wage “premium” of just over 18 percent compared to the average hourly earnings for all private-sector production employees.

Association officials said that labor shortages in construction threaten to undermine new federal investments in infrastructure, semiconductor chip plant and green energy construction. They urged federal officials to boost funding for construction education and training programs, noting the federal government currently spends five times as much encouraging students to go to college as it does on career and technical education programs.

“Unless federal officials begin to narrow the funding gap between college prep and career training, the construction industry will continue to struggle to find workers,” Sandherr said. “It is great that federal officials want to invest in construction projects; they also need to invest in construction workforce development.”