Construction continued its streak of monthly job gains in July, but a general slowdown in hiring and a rise in the national unemployment rate to 4.3% cast doubt on the ability of the US economy to keep growth moving forward.
“It looks like the U.S. is headed for recession,” said Anirban Basu, chief economist at Associated Builders & Contractors. While noting that some economists have been predicting an economic slowdown for more than two years, including himself, Basu said, “The recent slowdown in economic activity looks different. Unemployment is rising rapidly. Spending growth of the consumer has become slower… [and] US stock markets are generating huge losses.”
Overall, the US Department of Labor’s Bureau of Labor Statistics reported that the construction industry added about 25,000 jobs in July, with a significant majority, 18,700 workers, employed by specialty contractors. Of that amount, nonresidential specialty trade contractors added 11,300, while residential specialty businesses increased payrolls by 7,400 workers.
Building contractors added roughly 3,700 jobs overall, with non-residential firms contributing 2,000 jobs to that total and residential contractors hiring 1,700.
Meanwhile, heavy construction and civil engineering firms added about 2,900 jobs in July.
While these numbers indicate that construction companies plan to stay busy in the coming months, ABC’s Basu notes that the latest economic news “is an indication that the United States is caught in a growth scare and that there a growing consensus that the Federal Reserve has waited too long to start cutting interest rates.”
While he acknowledged the optimism behind recent construction job gains, Basu added that “if the economy continues to weaken, and it looks set to do just that, contractor confidence will start to wane.”
At the same time, Ken Simonson, chief economist of the Associated General Contractors of America, pointed out in a Press release this “The construction industry has maintained a steady pace of job gains even as job growth has cooled in other sectors.”
Simonson added, “Both residential and non-residential construction companies are adding workers, and the industry’s ‘wage premium’ is growing relative to other sectors,” noting that average hourly earnings for production and non-supervisory employees of construction have increased by 4.4% last year. , and is now $35.77 per hour.
However, these labor gains may come to an end. A July 30 ABC press release noted, for example, that its analysis shows that construction job openings fell by about 71,000 in June.
