The 6 states with the highest construction unemployment rates

Dive Brief:

  • The amount of construction workers looking for jobs across the country has dipped since last September, from 4.5% to 3.4%, according to a state-by-state analysis of Bureau of Labor Statistics data released Thursday by Associated Builders and Contractors.
  • Based on not seasonally adjusted data, 42 states had lower unemployment rates, Arkansas and Wisconsin were unchanged and six states were higher. Almost half of the states had estimated construction unemployment rates at or below 3%, according to the report.
  • Oklahoma had the greatest yearly percentage increase in construction unemployment at 1.7% while Alaska had the largest year-over-year decline, down 4% from September 2021.

Dive Insight:

The new data comes as soaring interest rates and a continued shortage of skilled workers put a drag on the commercial construction sector. Despite the low unemployment numbers, layoffs could be on the horizon, according to Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC.

“Higher interest rates are having a negative effect on plans for new construction projects; nonetheless, construction employment continues to rise as builders work on their backlog of projects,” he said in the release. “Although employers want to hold on to their workers, slowing demand for new projects along with completion of older projects eventually is likely to force some contractors to reduce their workforce.”

At the same time, he noted, construction employment will be helped by spending on civil projects implemented through the Infrastructure Investment and Jobs Act.

The six states where construction unemployment rose were:

  • Alabama.
  • Arizona.
  • Nebraska.
  • Oklahoma.
  • Oregon.
  • South Carolina.

An ABC analysis released Tuesday said that nationwide construction job openings increased by 36,000 in September and are up 74,000 from a year ago. It also found that construction workers quit their jobs at a lower rate than they were laid off or discharged for the first time since February 2021.

ABC Chief Economist Anirban Basu said the increase in job openings is not surprising, given the healthy backlog and high confidence levels reported by the country’s commercial contractors.

It also means that the Federal Reserve won’t pivot away from its hawkish stance on inflation anytime soon, he said. 

“Rather, interest rates are likely to continue to rise as the Fed battles inflation,” he said. “Firms focusing on infrastructure projects may continue to remain busy even if the economy ends up in a deep recession next year, due to a combination of current backlog and the expectation of major public infrastructure spending.”

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