The construction sector reported an increase of 13,000 jobs in March, as wages in the industry enabled it to hire more rapidly than other sectors, according to a new analysis of government data from the Associated General Contractors of America. However, association officials have expressed concerns that new tariffs and potential retaliatory actions from U.S. trading partners could negatively influence job growth in the sector.
"Contractors added employees at a faster clip than other sectors in March, as pay for construction craft workers outpaced wages for production workers in the overall private sector," said Ken Simonson, chief economist of the association. He warned that rising building costs due to tariffs could result in projects being delayed, affecting employment.
In March, the total construction workforce reached 8,313,000, showing a seasonally adjusted increase of 13,000 from February. Over the past year, construction employment grew by 143,000 jobs, or 1.8 percent, surpassing the overall nonfarm payroll growth of 1.2 percent.
The month saw nonresidential construction firms add 22,300 workers. This growth was led by a gain of 19,300 workers among specialty trade contractors and 3,400 in heavy and civil engineering construction firms, which offset a reduction of 400 workers in nonresidential building construction firms. However, residential construction employment saw a decline of 9,800 jobs, with homebuilders adding 3,100 positions, but residential specialty trade contractors losing 12,900 workers.
Average hourly earnings for production and nonsupervisory employees in construction, including both onsite craft workers and many office workers, increased by 4.1 percent to $36.79 per hour. This rise surpassed the 3.9 percent increase seen in the overall private sector.
The unemployment rate for construction workers with recent experience remained steady at 5.4 percent in March, unchanged from the same period last year. This indicates that contractors are retaining current employees despite a notable slowdown in hiring, job openings, and project expenditures, as noted by Simonson.
While the association welcomed March's employment gains, it highlighted concerns regarding the new tariffs announced on April 2. These tariffs could lead to a decline in construction demand as developers and public officials reassess plans in light of rising material prices and construction costs. The potential long-term benefits, possibly through a rise in manufacturing construction, remain uncertain.
“The construction sector grew at a steady clip in March, buoyed in large part by robust public-sector investments in construction activity,” stated Jeffrey D. Shoaf, the association’s CEO. Yet he raised the question of how these tariffs would impact the industry in both the short and long term.