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Average Hourly Earnings in Construction Top Private Sector Average by 9.9 Percent as Construction Firms Continue to Boost Pay to Attract Limited Pool of Available, Qualified Workers

Construction employment increased by 4,000 jobs in July and by 202,000, or 2.8 percent, over the past 12 months, while the number of unemployed jobseekers with construction experience rose, according to an analysis of new government data by the Associated General Contractors of America. Association officials noted that many firms likely would have added more employees last month if more were available.

“Job gains in construction have slowed markedly in recent months but the industry is still increasing employment nearly twice as much as other employers,” said Ken Simonson, the association’s chief economist. “The recent slowdown in hiring and construction spending may reflect contractors’ difficulty in finding enough qualified workers, rather than a downturn in demand for projects.”

Simonson noted that the 2.8 percent growth in construction employment between July 2018 and July 2019 was the slowest in more than six years but that the rate remained close to double the 1.5 percent increase in total nonfarm payroll employment. The unemployment rate for jobseekers who last worked in construction increased from 3.4 percent in July 2018 to 3.8 percent, but Simonson said that was nevertheless the second-lowest July rate since the series began in 2000.

“Despite these recent signs of a slowdown or pause in construction hiring, contractors still say it is very difficult to find qualified workers, and the latest government data on construction job openings showed they set yet another record high in May,” Simonson commented. “Contractors in all parts of the nation remain busy and are not reporting that owners are canceling or delaying project starts, which would be a more convincing sign of a downturn.”

Average hourly earnings in construction—a measure of all wages and salaries—increased 2.8 percent over the year to $30.75. That figure was 9.9 percent higher than the private-sector average of $27.98, the association official noted.

Association officials noted that construction firms continue to boost pay and other benefits as they work to recruit more people into the industry. They added that most firms report having a hard time finding qualified workers to hire, which is likely holding back broader employment gains in the sector. They urged Congress to pass measures to boost career and technical education and make students studying construction in community and technical colleges eligible for federal Pell Grants.

“Other than construction careers, few other jobs in today’s economy pay as well without requiring workers to pay for a costly college education,” said Stephen E. Sandherr, the association’s chief executive officer. “Washington can help put more young adults into high-paying construction careers by boosting funding for career and technical education and treating collegiate construction programs the same as other fields of study.”