Significant Drop for Construction Job Openings

2023-03-08T20:15:46-06:00

The count of open, unfilled jobs for the overall economy declined slightly in January, falling to 10.8 million, after an 11.2 million reading in December, which was the highest level since July. The count of total job openings should fall in 2023 as the labor market softens and the unemployment rises. From an inflation perspective, ideally the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Fed’s actions cool inflation. While higher interest rates are having an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing worker demand, but by recruiting, training and retaining skilled workers. The construction labor market saw a more significant decline for job openings in January as the housing market cools. The count of open construction jobs decreased from a revised data series high of 488,000 in December to just 248,000 in January. Not only is this a significant decline from the January 2022 reading of 396,000, but the January 2023 levels marks the lowest estimate for construction sector job openings since October 2020. The construction job openings rate declined to 3% in January after a 5.8% data series high in December 2022. The January 2023 job openings rate was the lowest since April 2020. The combination of these estimates points to the construction labor market having peaked in 2022 and now entering a cooling stage as the housing market weakens. Despite the weakening that will occur in 2023, the housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. Hiring in the construction sector increased to a 5% rate in January. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling. Construction sector layoffs ticked up to a 2.2% rate in January. In April 2020, the layoff rate was 10.8%. Since that time, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects. Nonetheless, the layoff rate has been above 2% for four of the last five months, which is consistent with a weakening trend. Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. 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. Related ‹ Mortgage Activity Increases Despite Mortgage Rate VolatilityTags: economics, home building, housing, JOLTS

Significant Drop for Construction Job Openings2023-03-08T20:15:46-06:00

Uptick for Construction Job Openings in December

2023-02-01T17:15:38-06:00

The count of open, unfilled jobs for the overall economy increased in December, rising to 11 million, the highest level since July. This was a surprise rise, as noted by many analysts, particularly given a growing chorus of corporate hiring freezes and job cuts. For now, the December data appears to be more noise than signal, although certainly that conclusion could reverse given data for January. Ideally, the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Fed’s actions cool inflation. While higher interest rates are having an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing demand, but by recruiting, training and retaining skilled workers. The construction labor market saw a similar increase for job openings in December as the housing market cools. The count of open construction jobs increased from 331,000 to 413,000 month-over-month. Despite a declining trend, the December reading is actually higher than the estimate from a year ago (359,000), a reminder of the persistent challenges of the skilled labor crisis in construction. The construction job openings rate increased to 5% in December. The data series high rate of 5.5% was recorded in April 2022. Despite recent data noise, it still appears that the count and rate of open, unfilled positions for the construction industry peaked in 2022 and is now trending lower as the housing market slows. The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. Hiring in the construction sector increased to a 4.6% rate in December. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling. Construction sector layoffs ticked up to a 2% rate in December. In April 2020, the layoff rate was 10.8%. Since that time, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects. The number of layoffs in construction increased to 153,000, compared to 133,000 a year ago. The number of quits in construction in December (125,000) was significantly lower than the measure a year ago (161,000). Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. However, 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. Related ‹ December Private Residential Spending DipsTags: economics, employment, home building, housing, JOLTS

Uptick for Construction Job Openings in December2023-02-01T17:15:38-06:00

Construction Job Openings Likely Peaked

2023-01-04T10:14:43-06:00

The count of open, unfilled jobs for the overall economy declined slightly in November, falling from 10.51 million open positions to 10.46 million. This represents a decrease from a year ago (10.92 million), a sign the labor market is slowing in response to tighter monetary policy. The degree of this slowing will be critical for the ongoing downshift in the size of rate hikes from the Fed during the first quarter. Ideally, the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Fed’s actions cool inflation. While higher interest rates are having an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing demand, but by recruiting, training and retaining skilled workers. The construction labor market saw a decline for job openings in November as the housing market cools. The count of open construction jobs decreased from 390,000 to 388,000 month-over-month. The November reading is actually higher than the estimate from a year ago (366,000), a reminder of the persistent challenges of the skilled labor crisis in construction. The construction job openings rate was relatively unchanged this month, holding at 4.8%. The data series high rate of 5.5% was recorded in April 2022. Given the outlook for construction, it now seems clear the count and rate of open, unfilled positions for the construction industry peaked in 2022 and is now trending lower as the housing market slows. The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. However, the market has slowed due to higher interest rates. Nonetheless, hiring in the construction sector weakened to a 4% rate in November. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling. Construction sector layoffs held at a 1.7% rate in November. In April 2020, the layoff rate was 10.8%. Since that time, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects. The number of layoffs in construction fell back to 129,000, compared to 150,000 a year ago. The number of quits in construction in November (138,000) was significantly lower than the measure a year ago (215,000). Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. However, 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. Related ‹ November Private Residential Spending DipsTags: economics, employment, home building, housing, JOLTS

Construction Job Openings Likely Peaked2023-01-04T10:14:43-06:00

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