Home builders struggling to fill demand for new single family housing face a labor shortage that resulted in the highest monthly count of unfilled jobs in nine years. The count of unfilled jobs in the overall construction sector reached a post-Great Recession high in February.
According to the BLS Job Openings and Labor Turnover Survey (JOLTS) and an analysis by the National Association of Home Builders, the number of open construction sector jobs (on a seasonally adjusted basis) increased to 193,000 in February from a downwardly revised estimate of 157,000 in January. The current estimate beat the previous cycle high of 177,000 unfilled positions set last May and represents the highest monthly count of job openings since July 2007.
The open position rate (job openings as a percent of total employment) for February was 2.8%, also a cycle high. On a three-month moving average basis, the open position rate for the construction sector increased to 2.3% for February.
The overall trend for open construction jobs has been an increasing since the end of the Great Recession. This is consistent with survey data indicating that access to labor remains a top business challenge for builders.
The construction sector hiring rate, as measured on a three-month moving average basis, dipped to 4.8%, although remaining near rates set in the spring of 2015. The quits rate for construction rose to 1.5% for February.
Monthly employment data for March 2016 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that home builders and remodelers increased hiring on a seasonally adjusted basis in recent months. Total residential construction employment grew by 13,400 in March.
The pace of hiring for the residential construction industry had been slowing over the course of 2015. With the recent acceleration however, the six-month average of monthly employment growth is now a robust 21,200.
Residential construction employment now stands at 2.598 million, broken down as 717,700 builders and 1.88 million residential specialty trade contractors.
Since the low point of industry employment following the Great Recession, residential construction has gained 612,000 positions.
In March, the unemployment rate for construction workers ticked up slightly to 7.1% on a seasonally adjusted basis. The unemployment rate for the construction occupation had been on a general decline since reaching a peak rate of 22% in February 2010, but has achieved a stable range of approximately 7% since May 2015.
For the economy as a whole, the February JOLTS data indicate that the hiring rate rose to slightly 3.8% of total employment. The overall open job rate ticked down to 3.7%, although remains near the cycle high last set during January.
Rising job openings for the overall economy are affecting many business sectors as the unemployment rate has fallen, with employers wanting new workers but holding greater numbers of unfilled positions.