May 2023 Market Trends Report
The U.S. economy added 253,000 jobs in April while the unemployment rate moved down to 3.4 percent, according to the U.S. Bureau of Labor Statistics (BLS) Employment Situation Summary.
Industrial sectors reported gains for employees on payrolls in April, including in construction (+15,000), manufacturing (+11,000) and transportation & warehousing (+10,600).
According to BLS, employment growth in the construction sector was mostly thanks to growth reported by specialty trades contractors (+26,700). Heavy and civil engineering construction employers (-8,100) and buildings construction employers (-3,600) both reported losing employees on payrolls in April.
The growth for transportation and warehousing was credit to strong months for subsectors including air transportation (+3,300) and support activities for transportation (+3,900).
JOLTS Report shows job openings fall again
The latest Job Opportunities and Labor Turnover Survey (JOLTS) report, which runs a month behind the BLS Employment Situation Summary, showed there were 9.6 million job openings on the last business day of March.
In March, job openings decreased across industrial sectors. While job openings in the manufacturing sector only decreased slightly (-14,000), there were 63,000 fewer openings in the construction industry in March and 229,000 fewer job openings in transportation, warehousing and utilities.
The job openings rate was 5.8 percent in March and was down by a full 1.0 percentage point since December.
Layoffs strike construction sector
Employers continued to hire at an elevated pace in March. Construction reported 33,000 more hires month-over-month and transportation, warehousing and utilities employers also reported 8,000 more hires in March over February. But hires did fall in manufacturing (-23,000), according to the Job Opportunities and Labor Turnover Survey (JOLTS) report.
Numbers for layoffs and discharges were more concerning. The number of layoffs and discharges increased to 1.8 million (+248,000) and 1.2 percent, respectively. Layoffs and discharges were up in construction (+112,000), manufacturing (+8,000). In transportation, warehousing and utilities, layoffs and discharges slightly decreased by 11,000.
Jobs Market Overview: April 2023
Overall Unemployment Rate
The unemployment rate decreased by .1 percent in April.
April marked the 28th consecutive month of job gains
Labor Force Participation Rate
The labor force participation rate has shown little movement since early 2022.
Source: Bureau of Labor Statistics, Employment Situation Summary (bls.gov/news.release/empsit.nr0.htm)
Industry Employment Trends
Monthly Job Change
(+2.6% YoY Difference)
|Industry||Monthly Job Change||YoY Difference|
|Warehouse & Storage||+4k||-1.1%|
|Architectural & Engineering||+5k||+5.1%|
|Consumer Services (Restaurants, Retail, Hospitality)||+31k||+2.6%|
Source: Bureau of Labor Statistics, Employment Situation Summary
The construction industry added 15,000 jobs in April, according to the U.S. Bureau of Labor Statistics.
According to Associated Builders and Contractors Chief Economist Anirban Basu, “job creation continues to exceed expectations.” In an announcement on May 5, Basu added that “demand for workers remains significantly above the supply.”
Employers also expect to increase their staffing levels over the next six months, according to ABC’s Construction Confidence Index, a diffusion index that signals construction contractors’ expectations for sales, profit margins and staffing levels. The April 2023 Index showed 50 percent of employers expect staffing to be “up small” over the next six months, and 7.8 percent of employers expect staffing to be “up big.”
Still, not all forecasts are rosy for the construction sector. The Architecture Billings Index (ABI), a leading economic indicator of demand for non-residential construction activity, dipped in April. The industry report, put out each month by The American Institute of Architects (AIA), reported a billings score of 48.5 for April, a drop from the 50.4 reported in March. Any score below 50 indicates a decrease in firm billings.
“High construction costs, extended project schedules, elevated interest rates, and growing difficulty in obtaining financing are all weighing on the construction market,” said AIA chief economist, Kermit Baker, Hon. AIA, in a press release from the AIA.
While economic winds may be uncertain, construction employers are still looking – and having a hard time finding talent. The New York Times reported in May on a shortage of workers available to build semiconductor facilities.
While job openings in the construction sector fell to their second-lowest level since mid-2021 in the latest JOLTS report, economists like Basu and Robert Dietz of NAHB say much of that drop comes from a weakening residential housing market.
“Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years,” Dietz said in his Eye on Housing blog. “While a slowing housing market will take some pressure off tight labor markets, the long-term labor challenge will persist beyond the ongoing macro slowdown.”