Posted on Monday, January 12th, 2015 at 1:20 am
Based on the Associated Builders and Contractors’ (ABC) latest report, there has been significant growth in construction last month and is a good sign of the construction industry’s recovery. The Chief Economist of ABC, Anirban Basu, opines that nonresidential construction has added approximately 5000 jobs in the month of November, giving a positive outlook to the industry’s growth.
The Nonresidential Construction Contribution:
On an overall basis the U.S. construction industry has added a total of 20,000 jobs in the month of November, of which 4,900 have been contributed by the nonresidential construction, reveals the Bureau of Labor Statistics in its preliminary estimate (on December 5th). Here, it can also be noted that the “greatest constraint on nonresidential job growth may no longer be a lack of demand for construction services, but rather a lack of supply of sufficiently skilled workers”, says Basu.
Further Basu observes that the industry wage pressures may expand in 2015 due to combined factors of tighter labor markets and a rise in demand for human capital, “perhaps to the extent that margins will be rendered too thin for many firms, even in the face of rising demand for services”.
He notices that it is the seasonal factors that the national construction unemployment rate has expanded from 6.4% to 7.5% in November on a non-seasonally adjusted basis. In this respect Basu says, “The construction unemployment rate has historically expanded during the colder months of the year, and November’s figure should not be seen as a cause for concern”.
The Construction Industry Snapshot:
- The following lines summarize the construction industry’s condition in the previous year.
- The residential building construction employment expanded in November by 3400 jobs and presently stands at 47,300 jobs (7.5%) annually
- The nonresidential building construction employment fell ‘for the month’ by 2400 jobs but then rose by 9500 jobs (1.4%) post November 2013
- The residential specialty trade contractors added 13,300 jobs in the month of November and in total have added 75,500 jobs (4.8%) post November 2013
- The nonresidential specialty trade contractors have added 7300 jobs ‘for the month’ with the employment category going up by 47,400 jobs (2.2%) since the same time a year ago.
Despite the market’s improvement, the construction industry has not been able to rebound to its previous levels (pre-recession). But the ‘new normal’ gives the hope of a positive outlook in the future.
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