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Wages Up 3.9% Year-Over-Year, Outpacing Economy

Hourly wages in the construction industry climbed to $30.44 last month, pushing the average wage up almost 4% from December 2017 to December 2018, according to an analysis from the Associated General Contractors of America (AGC).

As a result, the average hourly earning in construction are 10.8% higher than the nonfarm private sector rate, which grew by 3.2% in the last year, to $27.48.

In addition to the rising wages, employment is also up, continuing into record-breaking territory. December saw 38,000 jobs added and, for the year, the industry added 280,000 workers. According to the AGC, that’s an almost 4% increase.

Overall, construction employment was at 7,352,000 in December, the highest total since March of 2008. Many officials reported they plan to continue hiring in 2019, the analysis finds. “Demand for construction remains strong across most project types and locations,” said Ken Simonson, the association’s chief economist. “Job growth and pay increases in construction are outpacing those in the overall economy. But contractors continue to have difficulty finding qualified workers with the number of unemployed workers who have construction experience at the lowest December level in 19 years.”

According to a newly released survey from Sage Construction and Real Estate and the AGC, 79% of firms plan to add workers this year, but 78% of them said they expect to have difficulties filling some jobs. Some expressed concern that growth could be thwarted if government officials fail to resolve outstanding trade disputes and agree to infrastructure investments.

“Contractors are raising pay and benefits and are investing in training and technology in order to keep pace with demand,” said Stephen E. Sandherr, the association’s chief executive officer. “But they are also counting on Washington officials to work together to improve aging and over-burdened infrastructure and resolve trade concerns to ensure the economy continues to expand.”

U.S Bureau of Labor Statistics: Nearly Every State Made Employment Gains

According to information from the U.S. Bureau of Labor Statistics, the construction unemployment rate fell in 44 states in a year-over-year analysis. Associated Builders and Contractors released an analysis showing that November unemployment rates (not seasonally adjusted) were the best in:

  • Utah: 2.2%
  • Delaware: 2.3%
  • Vermont: 2.4%
  • Georgia: 2.6%
  • Oklahoma: 2.6%

“Unemployment rates were lower compared to a year ago in 44 states, higher in five states and unchanged in one, Idaho," said Bernard M. Markstein, president and chief economist of Markstein Advisors. “The country and 32 states posted their lowest November construction unemployment rates on record. Further, this is the first November on record when all state unemployment rates except for Alaska’s were below seven percent.”

The states having the highest estimated rates for construction unemployment were:

  • Mississippi: 6%
  • Rhode Island: 6%
  • Illinois: 6.2%
  • Maine: 6.5%
  • Montana: 6.6%
  • Alaska: 14.4%

“Alaska and Mississippi were also in the bottom five in October. For the fourth month in a row, Alaska had the highest estimated construction unemployment rate. Nonetheless, this was the state’s lowest November rate on record, matching its 2015 rate,” according to the analysis.

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