The construction sector's job growth in 2023 is boosting the US economy, with significant increases since pre-pandemic levels. The industry, fueled by the 2021 IIJA bill, added 25,000 jobs in September alone, outpacing overall employment growth. Challenges persist in finding qualified workers despite positive outlooks.
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The AGC found that 24 states and the District of Columbia added construction jobs
between August and September
of this year.
Due in large part to the 2021 IIJA bill, the construction sector is adding jobs to the U.S. economy. In September alone, the industry added 25,000 jobs compared with August. In fact, from September 2023 construction gained 238,000 jobs, which equates to a 3 percent increase. That's three times faster than overall employment since before the pandemic.
There are currently approximately 16 percent more construction jobs than in March of 2020, reported the National Association of Home Builders (NAHB). That's 5 percent more than the previous peak in 2006, according to Anat Nusinovich, economist of the National Association of REALTORS (NAR)
She said nationally the average growth rate of construction jobs from 2007 to 2023 was 0.4 percent.
Though the housing sector is one part of the construction market, it does serve as an indicator of just how construction jobs affect the economy.
Numbers Speak Volumes
Between 2007 and 2011, the construction jobs growth rate was negative, reaching a low of -16 percent in 2009 during the Great Recession.
"The rate saw another significant decline during the pandemic, dropping from 2.8 percent in 2019 to -3.2 percent in 2020," said Nusinovich. "However, the construction industry has since rebounded, reaching a growth rate of 3.3 percent in 2023," — 0.5 points higher than pre-pandemic."
The economist noted that this year, the local average growth rate for construction jobs is 2.9 percent, matching pre-pandemic numbers from 2019.
According to the NAR report, approximately 70 percent of analyzed areas outperformed this rate over the past year.
Notably, between 2019 and 2024, Cleveland, Tenn., registered the highest growth rate at 60.0 percent.
Elizabethtown, Ky., and Fayetteville, Ark., came in at 57.1 percent and 42.9 percent, respectively.
Further, two areas in Idaho — Idaho Falls with 37.5 percent and Boise City with 37.2 percent — came in the fifth and sixth places.
Punta and Cape Coral-Fort Myers, Fla., also showed "significant" growth, ranking fourth at 39.5 percent and tenth at 35.4 percent, respectively.
Meanwhile, Beaumont-Port Arthur, Texas, and Chicago-Naperville-Elgin, Ill.-Ind., experienced the lowest growth rates at 0.5 percent.
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These two cities were followed by Midland, Texas, with 0.7 percent, "despite having the highest share of construction jobs in 2024," said the NAR.
"Between July 2019 and July 2024, only 7.3 percent of the areas recorded no growth in construction jobs, with a growth rate of zero."
However, NAR's Nusinovich said, from before the pandemic until this summer, 17.3 percent of the observed areas experienced negative growth rates. That indicates a a loss of construction workers, she said, noting that the biggest losses were in Lake Charles, La., whose rate was -52.2 percent.
Next in line was Johnstown, Pa., with -37.9 percent, and Augusta-Richmond County, Ga.-S.C., at -29.9 percent.
"Ithaca, New York, which also had the lowest concentration of construction jobs, saw a decline of 21.4 percent in its construction workforce since 2019."
The AGC also tracks construction employment trends and found that 80 percent of U.S. states saw jobs increases in September. In all, 24 states and the District of Columbia added construction jobs between August and September of this year, according to the association.
More states would have added workers year-over-year if contractors could find enough qualified applicants, said AGC.
"It is great that four out of five states have added construction jobs over the past year," Ken Simonson, chief economist, said in a statement.
"Even more states would be seeing gains if there were enough qualified workers available to fill job openings," the association told ConstructConnect.
In its BLS analysis, AGC found construction jobs rose from September to September in 40 states and declined in 10 states and the District of Columbia.
Texas added the most construction jobs, at 42,300, followed by Florida, with 37,100; Ohio, 16,400; Michigan, 12,600; and Indiana, 12,500.
The largest percentage increases were in Alaska, with 3,700 jobs and Hawaii, with 4,500. Oklahoma, at 7,800, and Nevada, at 10,000, followed.
New York State saw the largest loss, at, -6,900 or -1.8 percent, followed by Oregon, -4,800 or -4.1 percent and Maryland, -4,600 or -2.9 percent.
AGC reported Oregon had the largest percentage loss, followed by Maryland and Maine.
"For the month, construction employment … was unchanged in Minnesota, Rhode Island and Vermont," said the association. "Texas added the most jobs, followed by Ohio, Florida, South Carolina and Colorado."
Ohio had the largest percentage gain, followed by South Carolina, Alaska and Nebraska.
Tennessee lost the most construction jobs in the month. Oregon and Louisiana followed.
North Dakota lost the highest percentage of jobs. Oregon and West Virginia were next.
"The value of construction starts rose 1.8 percent year-over-year in September," said AGC.
But the sector "edged down 0.9 percent year-to-date in the first nine months of 2024 compared to January-September 2023," ConstructConnect reported.
Nonresidential building starts rose 1 percent for the month but fell 7.5 percent year-to-date. Civil starts increased.
Among the 25 largest categories, AGC found that the best-performing year-to-date are electric power infrastructure and airports.
On a year-to-date basis through September, total construction starts were up 2 percent from 2023, according to Dodge Construction analysis.
Nonbuilding starts slipped 3 percent over that year and miscellaneous nonbuilding starts were up 10 percent.
Environmental public works starts were up 7 percent; highway and bridge starts, 3 percent and utility/gas starts down 23 percent.
Nonresidential building starts rose 2 percent year-to-date; institutional starts were up 13 percent; commercial starts were down 2 percent.
According to AGC, the Fed's take on the construction picture is that economic activity was "little changed" since early September.
The government reported commercial real estate markets were generally flat, although data center and infrastructure projects boosted activity in some areas.
"Contacts noted that it remained difficult to find workers with certain skills or in some industries, such as technology, manufacturing and construction."
According to ConstructConnect, AGC officials urged Congress to increase funding for construction workforce training and education programs.
The association believes the funding will help address workforce shortages likely holding back employment growth in the sector.
"Enabling more people to learn about construction as a career opportunity is essential," said Jeffrey Shoaf, CEO of AGC, adding that learning would help fill the openings created by the infrastructure, power and manufacturing projects under way.
Industry Looking Toward Future
Also tracking the construction jobs market, and chiefly how IIJA stacks up jobs-wise at its midway point is ARTBA.
The transportation builders association said the highway, street and bridge construction industry added nearly 40,000 jobs over the first half of IIJA.
"Industry employment surpassed record levels in 2023 and has continued rising since on a year-over-year basis," said ARTBA.
Looking forward, the Eno Center for Transportation believes 2024 could be "the tipping point" for IIJA funding to "start pouring out of the U.S. Treasury."
Jeff Davis, Eno senior fellow, recounted that IIJA loaded the Highway Trust Fund with 24 percent more money for highway account programs.
The 2021 bipartisan bill also allotted 32 percent for mass transit. Increases afterward are estimated in the 2- to 3-percent range per year.
Davis said through the first 10 months of fiscal year 2024, highway account outlays are up 20 percent from the 10-month mark pre-IIJA, in FY 2021.
"And mass transit account outlays are up 49 percent over FY 2021," said Davis, adding that the 2021 level suffered more from COVID aid displacement.
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At IIJA's half-way point a year ago, the Brookings Institute predicted that IIJA's total economic impact would "continue to evolve."
Adie Tomer, senior fellow, said that as more states and localities put federal dollars to work, an increased demand for skilled labor was expected.
He said that economists expected a high number of separations within infrastructure occupations would continue to challenge recruiting and retention.
"Construction of IIJA-funded projects will last well beyond 2026, when the legislation expires," said Tomer.
Inflation Reduction Act tax credits will support energy-related projects for another nine years.
"America needs to get serious about growing and diversifying the infrastructure talent pipeline, because time is running out," he stressed a year ago.
Marcum, a construction accounting firm, found in an industry survey that in 2024 the outlook across the board is a positive one.
"Our survey reveals that despite the challenges facing the construction industry, the overall outlook remains positive," said Joseph Natarelli.
The top concerns revealed in the survey can help business strategize for the future, said Roger Gingerich, leading Marcum's Midwest construction practice.
The survey found that ongoing labor recruiting and retention struggles remain a top concern for construction companies. In fact, 29 percent of Marcum survey respondents cited it as the biggest threat to their business.
The Associated Builders & Contractors noted that though construction firms have made gains, BLS statistics show a sharp decrease in job openings
"At the same time, there is not a lot of labor out there but demand for labor has subsided a little," said Zack Fritz, ABC economist.
As of September, construction unemployment was at 3.7 percent, just above the August mark of 3.2 percent.
"To be a craft worker in construction, you generally need to have experience and credentials in the construction field," said AGC's Simonson said.
He called it a chronic problem and despite the economic gains he believes the labor employment picture will continue to hamstring the industry. CEG
Lucy Perry
Lucy Perry has 30 years of experience covering the U.S. construction industry. She has served as Editor of paving and lifting magazines, and has created content for many national and international construction trade publications. A native of Baton Rouge, Louisiana, she has a Journalism degree from Louisiana State University, and is an avid fan of all LSU sports. She resides in Kansas City, Missouri, with her husband, who has turned her into a major fan of the NFL Kansas City Chiefs. When she's not chasing after Lucy, their dachshund, Lucy likes to create mixed-media art.
Read more from Lucy Perry here.
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