If you’re looking for a job in construction, now’s the time to dust off your application materials and references, and renew lapsed credentials or occupational licenses. That’s because we’re entering the peak earning period for contractors and subcontractors. Between March and April each year, new construction hires jump by 40%,* on average, signalling the start of the prime construction season.
Construction did better than the rest of the economy in 2020
2020 was an anomaly, of course. Construction employment and hires fell last April amid lockdowns and broader panic over the Coronavirus pandemic. But the spring/summer hiring surge came a month later as most projects resumed. Whereas past recessions have generally caused steeper job losses in construction than in most service-sector industries, the Covid recession has seen smaller job losses in construction than in most other industries. As of February, 2021, employment levels were “only” down 4.0% in construction, compared with 6.5% in service-sector industries.**
Parts of the construction sector expanded during the pandemic
Parts of the construction industry have been heavily disrupted over the past year. For example, employment has fallen 22.2% in oil and gas pipeline construction—the result of falling oil prices amid global reductions in driving and flying. Industrial building and commercial building establishments have also trimmed their payrolls by 10.0% and 4.1% respectively, thanks to flagging demand for space in production facilities, office buildings, malls, and stores.**
Nevertheless, companies primarily involved in residential building have experienced something of a boom since pre-pandemic February and homebuilder confidence has been historically high. Amid record-low mortgage rates, new housing starts reached a new record high in December and investments in home renovations surged as Americans pulled cash out of their homes through cash-out refinancing and poured it back into home offices, home gyms, play spaces, and swimming pools.
The outlook for the construction industry
As of late March, 2021, recent increases in lumber prices and mortgage rates pose a challenge for home builders. But there is plenty of good news on the way for the industry, too. Covid cases have fallen, vaccination rates have increased, job growth is rising again, and the economic recovery appears to be picking up. The Federal Reserve expects the economy to grow 6.5% in 2021, but has indicated it will keep rates low for the foreseeable future.
Furthermore, unprecedented fiscal stimulus is making its way into Americans’ bank accounts. About 100 million people either have received stimulus checks already or soon will. Especially for the many Americans who have neither lost jobs nor income since the pandemic began, some of that money will go into new housing or home improvements. And for those who put home purchase or home improvement plans on hold last spring/summer amid heightened uncertainty, the coming building season offers the chance for a fresh start.
That is good news for construction workers, 9.6% of whom were unemployed as of February, 2021.*** The industry currently has the fourth-highest unemployment rate, after mining, leisure and hospitality, and agriculture, but that could change in the coming months. As of mid-March, construction-related fields dominate the list of fastest-growing jobs in the ZipRecruiter marketplace. To the extent that online job posting volumes are a crystal ball, offering insight into employer sentiment and future hiring plans, they point to a strong recovery in the construction industry this spring and summer.
* U.S. Bureau of Labor Statistics, Job Openings and Labor Turnover Survey (JOLTS), average percent change in nationwide construction hires between March and April, 2011–2019.
** U.S. Bureau of Labor Statistics, Current Employment Statistics (CES), percent changes in payrolls in construction vs. service-providing industries between February, 2020 and February 2021.
*** U.S. Bureau of Labor Statistics, Employment Situation (February 2021), Table A-14.
