Industry Spotlight: The Construction Industry Hiring Boom

Building season is here, and construction hiring is about to go through the roof–temporarily, at least. About half a million construction workers are expected to be added to payrolls this coming April–typically the best time of year to find a job in the sector.

construction hires

A Difficult Job

Although many construction jobs are temporary or seasonal, most are full-time. Many involve long hours and physically demanding work done outdoors in rain or shine, on the ground or at great heights.

Construction jobs often require little formal education and provide some short-term on-the-job training, but they may require driving long distances to job sites, and they may take a toll on physical health and well-being. Construction laborers have among the highest rates of injuries and illnesses of all occupations.

The Future Outlook

The long-term outlook for construction employment is mixed. On the one hand, technologies like exoskeletons and sensors connected to predictive analytics programs promise to make construction jobs safer and more comfortable. On the other hand, many construction tasks have a fairly high chance of being automated in the future due to advances in artificial intelligence and robotics.

For now, that future seems far away. Between 2016 and 2026, the U.S. Bureau of Labor Statistics projects that construction employment will experience faster-than-average growth of around 12 percent. On ZipRecruiter, construction job postings have risen 41% in the space of a year. Employers are hungrily seeking construction project managers and experienced builders, who can supervise teams of workers, execute projects, and communicate effectively with clients, as well as more junior construction laborers, who are reliable, hardworking, and ready to learn.

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Steady Growth

After plummeting during the Great Recession, the construction sector has added jobs steadily since then. Despite growing by 36.8% (or 1.995 million jobs) since January 2011, however, construction employment has still not returned to its pre-recession peak. The number of unemployed construction workers continues to exceed the number of job openings, even though openings exceed unemployed workers in most other sectors, and economy-wide.  

One reason growth has not been faster is that housing construction has been relatively weak. In the 1970s and 1980s, there was one housing start for every 1.5 people added to the population, but in the 2010s, there was only one housing start for every 2.6 people. A major factor is stricter lending standards. Banks are being more conservative in the mortgage market after experiencing the 2007-2010 subprime mortgage crisis. The benefit of a slower, more cautious expansion may be that recent construction job growth is more secure, and less likely to erode in a future downturn.   

Varying Construction Job Market Landscapes

In addition to the broad national factors affecting construction, each region of the country has its own set of local factors either spurring construction or holding it back. At one end of the spectrum, West Virginia’s construction employment increased by 46% just over the past year ending February 2019, according to data from the U.S. Bureau of Labor Statistics. The boom in construction activity has largely been fueled by the oil and gas industry, which has been responsible for a 26.4% increase in oil and gas pipeline construction employment nationwide over the past year.

At the other end of the spectrum, Vermont and Maine have seen construction employment decline by 6% and 7% respectively during the past 12 months. Housing prices there have been essentially flat in recent years, while construction costs, like labor and building materials, have continued to rise. In parts of the Midwest, like Indiana, shrinking populations have reduced housing prices to such an extent that home prices are below the replacement cost of new construction, and it simply doesn’t make sense to build.

The weakest housing market of all is the West, however, where single-family housing completions were down 33.6% over the year ending February 2019, according to data from the U.S. Census Bureau. The Bay Area, Los Angeles, and Seattle are adding jobs faster than affordable places to live. Although home prices are rising rapidly, construction is limited by zoning restrictions and the Not-in-My-Back-Yard (NIMBY) phenomenon of opposition to development.  

Why Falling Mortgage Rates and Rising Oil Prices are Good News

Despite housing construction being relatively subdued nationally during the past few months, there is reason for optimism as we head into the 2019 spring/summer home-buying season. Construction is among the industries most sensitive to interest rates, and mortgage rates have now fallen almost 70 basis points over the past four months, hitting the lowest levels in a year. In February, new home sales finally appeared to start bouncing back. Healthy growth in sales and remodeling activity could support further growth in employment among residential remodelers, which grew 9.5% over the past 12 months.

Rebounding oil prices may also spell good news for workers in oil and gas pipeline construction. In the fourth quarter of 2018, oil prices fell sharply, leading to a significant drop in hydraulic fracturing activity and introducing uncertainty into the outlook for the industry. The 2019 first-quarter rebound in oil prices should help the industry extend its streak of job gains this spring and summer. After all, shale wells typically produce most of their oil or gas in the first two years, so oil companies must keep hiring and drilling just to keep production steady.

Rebounding oil prices may also spell good news for workers in oil and gas pipeline construction. In the fourth quarter of 2018, oil prices fell sharply, leading to a significant drop in hydraulic fracturing activity and introducing uncertainty into the outlook for the industry. The 2019 first-quarter rebound in oil prices should help the industry extend its streak of job gains this spring and summer. After all, shale wells typically produce most of their oil or gas in the first two years, so oil companies must keep hiring and drilling just to keep production steady.

oil prices

 

Written by

ZipRecruiter's Labor Economist, Julia conducts job market research and provides unique insights to job seekers, employers, and the ZipRecruiter leadership team.

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