Construction Labor Market Remains Tight
The construction labor market remains tight, with the number of job openings in the industry rising year over year.
The job openings rate in construction edged down to 4.3% in December, with 337,000 open positions in the sector, following a historic high (445,000 openings) in October 2021. The December rate was significantly higher than the 267,000 count recorded a year ago.
The post-virus peak rate of hiring occurred in May 2020 (10.3%) as a rebound took hold in home building and remodeling. It has trended higher since fall 2020 as the broader labor market has improved and construction hiring has increased.
Construction sector layoffs ticked down in December to a 1.7% rate, compared with the layoff rate of 10.9% in April 2020. Since that time however, the sector layoff rate has been below 3%, with the exception of February 2021 because of weather effects. The rate trended lower in 2021 due to the skilled labor shortage.
The number of job quits for the overall economy continues to be elevated as the Great Resignation continues. More than 4.3 million workers quit their jobs in December — the fifth consecutive month of more than 4 million monthly resignations. The number of quits in construction in December (181,000) declined somewhat, although that was off a data series high in November (225,000).
Looking forward, the construction job openings rate is likely to rise as both the residential and nonresidential construction sectors expand. Attracting skilled labor will remain a key objective for builders and remodelers in the coming quarters, and will become more challenging as the labor market strengthens and the unemployment rate declines.
NAHB Chief Economist Robert Dietz provides more detail in this Eye on Housing post.