Construction Employment Trails Pre-Pandemic Level Amid Supply Chain Challenges and Rising Prices

According to an analysis by the Associated General Contractors of America of government employment data, construction employment in June remained below the pre-pandemic peak in February 2020 in 39 states. Association officials noted that many construction firms are struggling to cope with supply chain challenges and rising materials prices, undermining demand for new projects and impacting firms’ ability to hire new workers.

“The construction industry is a long way from full recovery in most states, in spite of a hot homebuilding market in many areas,” said Ken Simonson, the association’s chief economist. “Soaring materials costs, long production times for key items, and delayed deliveries are causing owners to postpone projects.”

From February 2020—the month before the pandemic caused project shutdowns and cancellations—to last month, construction employment increased in only 11 states and was flat in Washington. New York shed the most construction jobs over the period (-54,300 jobs or -13.3%), followed by Texas (-54,100 jobs, -6.9%) and California (-36,500 jobs, -4.0%). Wyoming recorded the largest percentage loss (-15.3%, -3,500 jobs), followed by Louisiana (-15.1%, -20,700 jobs) and New York.

Of the states that added construction jobs since February 2020, Utah added the most (7,000 jobs, 6.1%), followed by Idaho (4,400 jobs, 8.0%), South Dakota (1,400 jobs, 5.9%) and Rhode Island (1,200 jobs, 5.9%). The largest percentage gain was in Idaho, followed by Utah, Rhode Island and South Dakota.

From May to June, construction employment decreased in 25 states, increased in 24 states and Washington, and held steady in Maine. The largest decline over the month occurred in New York, which lost 6,900 construction jobs or 1.9%, followed by Pennsylvania (-4,100 jobs, -1.6%) and Texas (-3,300 jobs, -1.3%). The steepest percentage declines since May occurred in Vermont (-3.5%, -500 jobs), followed by New York, Alabama (-1.9%, -1,700 jobs), and North Dakota (-1.9%, -500 jobs).

Georgia added the most construction jobs between May and June (5,700 jobs, 2.9%), followed by Kentucky (2,700 jobs, 3.4%) and Florida (2,500 jobs, 0.4%). Kentucky had the largest percentage gain for the month, followed by Alaska (3.0%, 500 jobs) and Georgia.

Association officials cautioned that construction employment is unlikely to grow in many parts of the country until many of the supply chain challenges impacting firms improve. They added that the president could help by removing tariffs on key construction materials. They added that ending the unemployment supplements would add to the pool of workers for manufacturers, shippers, and construction firms to hire.

“Easing tariffs will help, but what the construction supply chain needs are workers to manufacture the products, ship them to contractors and build the projects the economy demands,” said Stephen E. Sandherr, the association’s chief executive officer. “Unemployment supplements helped families survive the pandemic-related lock downs, but they are undermining the post-pandemic recovery.”