From this perspective, the October jobs report would seem to represent a peak, as the construction industry added only 1,000 jobs.
But other factors could be at work. The overall increase of 1,000 jobs in the industry came after gains in both nonresidential and residential construction of 3,200 and 2,400 jobs, respectively.
Those were offset by declines in heavy and civil construction, which fell by 400 jobs, and in specialty trades, which declined by 4,000 positions.
Contributing to the anemic overall gains has been the difficulty of finding new employees to make up for a receding pipeline of talent. Job openings in construction have risen to the highest level ever in recent months and have even outpaced hiring, a first for the industry.
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This worker shortage has kept the unemployment rate for construction suppressed below long-term averages and has helped to drive additional wage growth.
While the Federal Reserve has been raising interest rates to tame inflation, backlogs in building projects have continued to rise for both residential and nonresidential contractors.
In addition, funds from the federal infrastructure legislation are now making their way toward projects, helping to inflate opportunities that may have otherwise slowed down in the current environment. All of those factors may reduce any pressures on construction employment.
To be sure, this does not mean that this time is different. With most economists forecasting a recession over the next 12 months, construction employment may indeed decline and job openings may recede. Developers could start to pull back, dragging the opportunity pipeline and construction backlogs with them.
