Dive Brief:
- Construction counted 305,000 open jobs on the last day of June, according to Bureau of Labor Statistics data released Tuesday. That represented a 36% jump year over year and a 4.8% increase month over month.
- Collectively, 3.5% of all construction jobs went unfilled in the first month of the summer. Meanwhile, the hiring rate decreased slightly from a year ago, as did the layoff rate.
- “The combination of higher job openings and a lower hiring rate suggests contractors may be finding it more difficult to fill certain positions while remaining measured about expanding their overall workforce,” Macrina Wilkins, director of market insights for the Associated General Contractors of America, told Construction Dive.
Dive Insight:
The increase in open jobs can function as an indicator of construction health — more unfilled positions may be a sign of higher demand for projects. But economists were cautious about the latest job openings data from a broader context.
“Interpreting these data is often challenging,” Anirban Basu, chief economist for Associated Builders and Contractors, said in a release analyzing Tuesday’s report. “One could take these figures at face value and conclude that construction is thriving and driving demand for workers higher.”
But, Basu said, Monday’s spending report showed a 3.2% month-to-month decline in total construction spending. Private nonresidential spending increased modestly month to month in June, but declined by 4.7% year over year.
That drop means higher job openings likely have an explanation outside of increased project demand.
“Many contractors view a structural shortfall of skilled labor as their primary challenge because many highly experienced, productive workers are retiring,” said Basu. “It is conceivable that these workers are being replaced with less skilled and productive workers, thereby requiring a few workers to be replaced by many.”
Indeed, Wilkins pointed to Tuesday’s numbers as the start of a potential trend.
“The job openings rate has now been higher than a year ago for three consecutive months,” she said. “I wouldn't read too much into one month's data, but if that pattern continues it could point to employers having more difficulty filling open positions.”
Wilkins referred to possible “skills mismatch” wherein firms feel the labor market tighten and continue to recruit for the occupations toughest to fill.
In addition, the long-term result of President Donald Trump’s crackdown on immigration and deportation of unauthorized workers could begin to show up in the data.
“It may be that certain people who had been working in construction were doing so without proper documentation,” said Basu. “At least some of these workers are no longer available at jobsites, inducing faster hiring and expanding job openings as contractors work to replace them.”
