Construction Underperforms Broader Economy in December Jobs Report

The construction industry added 8,000 jobs on net in December, according to an Associated Builders and Contractors (ABC) analysis of data released today by the U.S. Bureau of Labor Statistics. On a year-over-year basis, industry employment has increased by 196,000 jobs, an increase of 2.4%. 

Nonresidential construction employment increased by 4,700 positions on net, with growth in all three subcategories. Nonresidential specialty trade added the most jobs, increasing by 3,900 positions. Heavy and civil engineering added 600 jobs, while nonresidential building added 200 jobs last month.

The construction unemployment rate rose to 5.2% in December. Unemployment across all industries decreased from 4.2% in November to 4.1% last month.

“The December jobs data bode well for the broader economy but poorly for the construction industry,” said Anirban Basu, ABC chief economist. “Nationwide employment increased for the 48th consecutive month in December, and it increased rapidly. The 256,000 net new jobs were the most in any month since March, while the unemployment rate ticked down to 4.1%.

“Construction job growth, on the other hand, has clearly slowed in recent months,” Basu said. “The 15,000 jobs added during the fourth quarter of 2024 represent the fewest over any three-month period since the middle of 2021. While industrywide job growth is still significantly faster than economywide hiring over the past year, the interest rate implications of these data represent a greater concern for contractors. Bond yields surged even higher as a result of this jobs report, suggesting that the Federal Reserve may not cut interest rates during the first half of 2025. Contractors intend to increase their staffing levels in the coming months, according to ABC’s Construction Confidence Index, and it will be interesting to see if those intentions remain intact in early 2025.”