US construction growth prompts skills shortage fears

Construction employment in the US totalled 6.39 million people in August, according to the Associated General Contractors of America (AGC) trade association. This was the highest since February 2009.

The AGC also said that industry unemployment, defined as the number of people looking for work who were last employed in the construction industry, was at its lowest since 2001, at 525,000 people.

AGC chief economist Ken Simonson said, "The recent slowdown in construction hiring appears to reflect difficulty in finding qualified employees rather than lack of projects needing workers. The pool of qualified construction workers will need to expand if firms are going to be able to keep pace with rising construction demand."

He said that the figure for construction employment in August was up by only 3,000 – about +0.05% – on the previous month, and that monthly increases in industry hirings had averaged just 6,800 per month for the last six months. This compared to 29,700 new jobs per month in the previous six-month period.

"Hiring has slowed to a crawl in the past six months even though contractors have raised wages at the fastest rate in six years and spending on most types of structures has accelerated," said Mr Simonson. "Other indicators – such as rising architectural and engineering employment and permits for both single- and multi-family housing – suggest demand for construction will remain strong, but contractors may have difficulty finding enough workers to take on all those projects."

According to the AGC, average hourly earnings in construction increased +2.8% from August 2014 to August 2015, up from +2.1 in the previous 12 months It said this was a sign that contractors are raising pay to attract more workers.