Associated General Contractors' Ken Simonson

ARLINGTON, VA—Construction employment increased year over year in just 61% of 358 metro areas between August 2015 and August 2016, the smallest share since April 2013, the Associated General Contractors of America said Wednesday. AGC officials attributed the shortfall to labor shortages rather than job shortages—a view that's buttressed by last week's Dodge Data & Analytics report that construction starts for August were up 21% from the year-ago period.

“While the number of metro areas with employment increases has been slipping, the number with decreases—76 in August—has held roughly steady,” says Ken Simonson, chief economist at AGC. “Meanwhile, job openings have been at a 10-year high but hiring has stalled in many parts of the country. Together, these facts make it clear that the slowdown in hiring has more to do with workforce shortages than shortages of work.”

AGC says the August data are consistent with survey results the association released last month showing that two-thirds of construction firms are having difficulty finding qualified craft workers to hire. “Many firms would be hiring more people if only they could find qualified applicants to bring onboard,” says Stephen E. Sandherr, the association's CEO. He's calling on the Senate to act quickly on a measure to reform and boost funding for career and technical education programs, which has already passed in the House.

August starts were at a seasonally adjusted annual rate of $711.2 billion, according to Dodge Data. Total construction starts were boosted by nonresidential building, which was helped by the start of a $3-billion petrochemical plant in Louisiana, the $1.7-billion Wynn Casino in the Boston area, and a $508-million terminal upgrade at Seattle-Tacoma International Airport.

The nonbuilding construction sector also experienced strong growth last month, with its public works segment lifted by the start of a $3-billion natural gas pipeline that will traverse Alabama, Georgia and Florida. In addition, residential building saw a moderate August gain; multifamily came on especially strong with a 25% gain, including the groundbreaking for the $900-million Wanda Vista Tower in Chicago.

Dodge Data says total construction starts on an unadjusted basis were $439.3 billion for the first eight months of the year, down 7% from a year ago. However, the year-to-date decline for total construction is becoming smaller as the year progresses.

Instant Insights /

Construction Jobs Gain in 61% of Metros

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