The November jobs report out Friday showed construction companies remain measured in their staffing decisions as economic uncertainty weighs on the sector amid high interest rates and immigration policy shifts.
Data from the Labor Department showed that construction firms added 10,000 jobs in November following a modest gain of 2,000 jobs in October. Analysis from the Center for Economic and Policy Research showed that construction employment had been growing by closer 20,000 jobs per month between September 2023 and 2024.
“What I sense among many contractors, whether residential or nonresidential, is that they have reasonably staffed up their lower-skilled positions but continue to scramble for the most talented construction workers,” Associated Builders and Contractors chief economist Anirban Basu told Yahoo Finance after the release.
Just 1,400 jobs were added in the residential construction industry last month out of the 10,000 new roles added to the broader construction sector. Speciality trade contractors — think plumbers and electricians — saw the bulk of the hiring in the sector last month.
“We’ve got some supply chain issues, and we’ve got uncertainties of course regarding policymaking, tariffs, tax cuts, deregulation, federal government spending, and immigration policy as a new president takes office,” Basu said.
“You put all that together, one could understand why contractors might be embracing a wait-and-see attitude.”
The slowdown in hiring underscores how high borrowing costs have dampened contractors’ willingness to move forward with projects and beef up their staffing.
Construction job openings dropped nearly 40% from a year ago in October, according to a separate report from the Bureau of Labor Statistics released Tuesday. Contractors hired 293,000 workers during the month, down 12.5% from September and down 23% from the prior year, and reached the lowest level since 2020.
Still, industrywide employment growth has outpaced the broader economy over the past year, Basu noted.
The organization’s Construction Confidence Index, which surveys 23,000 construction companies across the country, showed that nearly 45% of builders expect to add jobs in the next six months, while only about 13% expect to reduce jobs. The total number of workers employed in the construction industry as of November stood at a record high over 8.3 million.
But as housing starts remained sluggish this year while inventories rose and mortgage rates held well above 6%, renewed uncertainty about labor supply due to expected changes in immigration policy that could come during the next Trump administration will likely weigh on the sector into the new year.