Dive Brief:
- Construction counted 298,000 open jobs on the last day of September, a 13.7% increase month over month and a 44.7% increase year over year, according to Bureau of Labor Statistics data released Tuesday.
- Meanwhile, 190,000 construction workers quit their jobs in September, the highest number since the first half of 2023, according to Anirban Basu, chief economist for Associated Builders and Contractors.
- The BLS job openings report continues to paint a picture where contractors in booming sectors still see strong demand for additional employees, economists said, while struggling to retain the workers they already have.
Dive Insight:
Basu said that the high number of quits could indicate the labor market is tightening.
“Unsurprisingly, contractors have responded by holding on to workers they otherwise might part with; industrywide layoffs are down by 56,000 year over year, and the layoff rate remains lower than in any month on record prior to 2020,” he said in ABC’s analysis of the data.
Meanwhile, one in four ABC members predicts a contraction in profit margins over the next six months. A tougher labor market would only make that worse, said Basu.
“Reemerging worker shortages will put upward pressure on labor costs, a dynamic that will exacerbate the effects of high borrowing costs and ongoing materials price escalation,” he said.
Nonetheless, both the hiring rate and job openings rate, which indicate the number of hires and job openings as a percentage of total jobs, were up year over year, said Macrina Wilkins, director of market insights for the Associated General Contractors of America. At the same time, the industry’s layoff rate declined year over year.
“The increase in hiring is a welcome improvement, although the rate remains low by historical standards,” Wilkins told Construction Dive via email. “The sharp increase in job openings comes against a backdrop of strong demand for data centers, power projects and select other types of nonresidential construction, even as activity in other sectors remains weak. Contractors continue to need workers for these projects, but many are struggling to find qualified applicants.”
Wilkins called the rise in quits “noteworthy” but tagged several potential contributing factors, such as employees leaving construction for more in-demand sectors, departing for different working conditions or as a result of immigration enforcement.
“While the JOLTS data do not tell us why workers are leaving, these findings point to the range of challenges contractors face in retaining employees. The decline in layoffs suggests firms are holding on to the workers they already employ, even as they continue to struggle to fill open positions,” she said.
