February Jobs Report – Construction Employment off to a Remarkable Start

February saw continued strength in the labor market, with an increase in total payrolls of 273,000, and specialty trade contractor and residential construction jobs growing by 26,000 and 10,000 new jobs respectively.

With the strong January construction numbers, 2020 has already created nearly 100,000 new construction jobs just in the first two months, and the share of construction as a share of overall employment has climbed from a post-recession low of 4.1% to a current decade high of 5%.

While this recovery in overall construction is a wonderful sign that the labor market is creating new opportunities for skilled tradespeople, the overall number of jobs in residential construction is still unfortunately lagging behind.  Construction jobs caught up to their pre-recession high in mid-2019, but residential construction jobs are still nearly 50,000 jobs short of where they were at the beginning of the great recession, and around 150,000 jobs short of their all-time high.

This shortcoming has two negative side effects.

• First, valuable careers haven’t been created for people who would otherwise find meaningful, well-paying work in the residential skilled trades business,
• Second, a lack of available workers is a contributing factor to the shortage in housing across the country.

Takeaway

Home services careers share a lot of the same technical skills as those required for construction and residential construction. Growth in the industry is broadly positive, but challenges around meeting consumer demand for housing and housing related services are going to need continued employment growth in order to be addressed.