Construction sector employment rose by 4,000 jobs in May, driven by wage increases that enabled the industry to add workers faster than other sectors. This is according to an analysis of new government data released by the Associated General Contractors of America. The association noted that while the industry has been adding jobs monthly for over a year, market uncertainty has led to a slowdown in hiring.
Ken Simonson, the association’s chief economist, stated, “Nonresidential construction firms added employees in May for the 13th month in a row.” He attributed the slowdown in hiring to "constant changes in tariffs and other policies that are affecting the cost and demand for construction."
In May, construction employment reached 8,314,000 positions on a seasonally adjusted basis, marking an increase of 4,000 from April. Over the past year, headcount rose by 126,000 jobs or 1.5 percent. However, this growth rate was slower compared to a 2.8 percent increase recorded a year earlier.
Nonresidential construction saw an addition of 11,300 workers in May across various sectors: specialty trade contractors gained 4,500 jobs; nonresidential building construction added 3,100; and heavy and civil engineering construction increased by 3,700 jobs. These gains were offset by residential construction job losses totaling 7,400 positions due to declines among residential specialty trade contractors.
Average hourly earnings for production and nonsupervisory employees in construction increased by 4.7 percent over the year to $37.13 per hour. This rise exceeded the overall private sector's pay increase of four percent.
The unemployment rate among workers with recent construction experience fell to 3.5 percent in May from 3.9 percent a year earlier. A separate report from BLS indicated that the job openings rate in construction declined to its lowest April level since 2020 at 2.9 percent. Meanwhile, hiring rates slightly increased to 4.2 percent as layoff rates rose marginally to 2.1 percent.
Association officials emphasized that more certainty regarding tariff rates and federal spending priorities could prompt developers to move forward with stalled projects. They urged continued negotiation on trade deals and Senate passage of tax legislation as measures that would help alleviate investor concerns.
Jeffrey D. Shoaf, CEO of the association said: “Construction firms continue to hire and boost wages but the pace of growth has slowed as demand for certain types of projects cools.” He added that clarity on tariffs and taxes would likely stimulate project demand again.