February 2023 Market Trends Report
The U.S. economy added 517,000 jobs in January while the unemployment rate moved down to 3.4 percent, according to the U.S. Bureau of Labor Statistics (BLS) Employment Situation Summary.
Construction again led the way for job growth among industrial sectors in January. The construction industry saw employees on payrolls grow by 25,000 in January.
According to BLS, employment in manufacturing also grew (+19,000) as both nondurable goods (+15,000) and durable goods sectors (+4,000) saw spikes.
Meanwhile, employment in transportation and warehousing grew by 22,900 jobs, including gains in air transportation (+2,900), transit and ground passenger transportation (+7,400) and support activities for transportation (+6,500) -- a sector that includes aircraft mechanics and service technicians, along with laborers and freight, stock and material movers.
JOLTS Report shows job openings, hires remain high across industrial sectors
The latest Job Opportunities and Labor Turnover Survey (JOLTS) report, which runs a month behind the BLS Employment Situation Summary, showed there were 11 million job openings on the last business day of December.
In December, job openings increased in construction (+89,000), while manufacturing (-39,000) and transportation, warehousing, and utilities (-31,000) saw slight decreases.
Employers continue to hire at an elevated pace and workers left jobs at a rate higher than before the pandemic. While hires held steady in December in manufacturing, the construction sector saw companies hire 34,000 more people than it did in November. Meanwhile, quits spiked to 158,000 (+20,000 over November) in construction and only decreased slightly (-11,000 over November) in manufacturing.
Jobs Market Overview: January 2023
Overall Unemployment Rate
The unemployment rate ticked down to 3.4%.
Job growth in January included growth in industrial sectors including construction and manufacturing.
Labor Force Participation Rate
The labor force participation rate has shown little net change since early 2022.
Source: Bureau of Labor Statistics, Employment Situation Summary (bls.gov/news.release/empsit.nr0.htm)
Industry Employment Trends
Monthly Job Change
(+3.3% YoY Difference)
|Industry||Monthly Job Change||YoY Difference|
|Warehouse & Storage||+2.9k||+3.3%|
|Architectural & Engineering||+6.3k||+4.8%|
Source: Bureau of Labor Statistics, Employment Situation Summary
The Aerotek Take
“Employees are feeling empowered in today’s market and demand for new hires continues to be fairly strong, particularly in industries like construction and aviation. To make the right moves, it remains critical to partner with a company like Aerotek that specializes in specific industries – in our case, construction, manufacturing, distribution & logistics, facility management and aviation – and can identify a great match in those industries when it sees one.”
Bill Ruff, Vice President of Strategic Sales
Finding talent is going to be a top priority for the construction industry in 2023. While some sectors of the industry could experience a downturn, there are significant tailwinds in other parts of construction that indicate the need for talent isn’t going away.
One of those sectors is infrastructure. According to Dodge, public works construction will increase by 18% in 2023 to $225 billion. That increase is in large part due to the Infrastructure Investment and Jobs Act (IIJA), which will provide $1.2 trillion to invest in the nation’s roads, bridges, transit systems, airports, waterways, drinking water and wastewater systems, as well as energy infrastructure.
“We have not seen this kind of investment in infrastructure since WWII,” Dodge Chief Economist Richard Branch told ConExpo in January.
According to Associated Builders and Contractors, the construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor.
The construction industry averaged more than 390,000 job openings per month in 2022, the highest level on record, and there doesn’t appear to be a sudden drop for that number on its way, according to experts.
“The shortage of construction workers will not disappear in the near future,” said ABC Chief Economist Anirban Basu. In a recent announcement, Basu said that “many contractors continue to experience substantial demand from a growing number of mega-projects associated with chip manufacturing plants, clean energy facilities and infrastructure.” Additionally, he said the industry’s workforce is facing a shortage of younger workers and skilled tradespeople.
In October 2022, McKinsey laid out a plan to address the labor shortage in its report entitled, “Will a labor crunch derail plans to upgrade US infrastructure?” The first step of the plan was to increase the supply of construction labor.
“To address the need for labor both in the aggregate and for a targeted set of bottleneck roles, companies could focus on reskilling and upskilling existing workers, attracting new people, and pulling people currently on the sidelines back into the labor force,” the report said.
There is a significant appetite among workers to learn new skills, according to Aerotek’s Q4 2022 Job-Seeker Survey. Additionally, our research indicates that it is clear that job seekers are looking for more than just pay when deciding to accept a new job.
These motivators outside of an employee’s wage will become more and more critical as the labor shortage continues. McKinsey calls this the “nonwage value proposition.”
“Taking a more expansive view of the nonwage value proposition could also help employers access younger, more diverse talent. McKinsey’s research emphasizes the importance of supportive management, purpose and values, and a flexible working schedule,” McKinsey’s report said. “In a sector that is critical for building out the next-generation infrastructure required to propel American and global economic growth, there’s an opportunity to frame such employment as deeply meaningful and compelling.”
Spotlight: The Aerotek Take
“Employers are anticipating a busy summer and the challenge continues to be finding the talent – specifically skilled talent -- to build their projects. As our clients begin to ramp up, we urge them to be as proactive as possible with project planning so we can ensure they have the right talent for their jobs."
Josh Miles, Regional Business Development Executive and Divisional Lead – Construction, Environmental and Energy