The November jobs report, released Friday, reveals that construction companies continue to adopt a cautious approach to hiring, reflecting ongoing economic uncertainty driven by high interest rates and potential shifts in immigration policy.
Data from the Labor Department showed that construction firms added 10,000 jobs in November, following a modest increase of just 2,000 in October. Research by the Center for Economic and Policy Research indicated that construction employment had been growing at a rate closer to 20,000 jobs per month between September 2023 and 2024.
Anirban Basu, chief economist at Associated Builders and Contractors, told Yahoo Finance that contractors are facing difficulty in securing top talent despite filling many lower-skilled positions. “What I’m hearing from contractors is that they’ve staffed up in lower-skilled roles, but they are still struggling to find skilled workers,” he explained.
Of the 10,000 new jobs in the construction sector last month, only 1,400 were in residential construction. The majority of hiring was in specialty trades, including positions for plumbers and electricians.
Basu pointed to several factors contributing to the cautious hiring trend, including supply chain disruptions, ongoing policy uncertainties, and potential changes in federal immigration policy. “With changes in government policy, tariffs, tax cuts, deregulation, and immigration laws, contractors are understandably adopting a wait-and-see approach,” Basu said.
The slowdown in hiring is also tied to the high borrowing costs that have dampened contractors’ willingness to invest in new projects or expand their workforce. According to a separate report from the Bureau of Labor Statistics, construction job openings dropped nearly 40% year-over-year in October. The industry hired 293,000 workers that month, a decrease of 12.5% from September and 23% from the previous year, marking the lowest hiring level since 2020.
Despite the slowdown, Basu noted that the construction industry has seen stronger job growth than the broader economy over the past year. The Construction Confidence Index, which surveys 23,000 companies nationwide, shows that nearly 45% of builders expect to increase their workforce in the next six months, while only 13% anticipate cuts. As of November, total employment in the construction sector reached a record high of more than 8.3 million workers.
However, housing starts remain sluggish, inventories are rising, and mortgage rates remain above 6%, which may continue to pressure the sector. Additionally, potential changes to immigration policy under the next administration could add further uncertainty, influencing hiring trends into the new year.
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