October proved to be another successful month for the construction industry, adding 84,000 net new jobs and bringing the sector's unemployment rate to 6.8%. According to Associated Builders and Contractors (ABC), the industry has fared well over the past six months with a 73% recovery of jobs lost during the early days of COVID-19. Analysts say nonresidential construction employment is behind the industry's positive numbers, nearly 60,000 of which attributed to last month's net new jobs.
ABC reported increases in all three of the nonresidential subcategories, including nonresidential specialty trade contractors with 27,500 jobs , heavy and civil engineering with 18,800 and nonresidential building with 13,400. ABC Chief Economist Anirban Basu said the economy is showing "forward momentum," despite numerous hurdles.
"Nonresidential construction's momentum is especially impressive," Basu said in the report. "Despite tighter lending conditions, negatively impacted state and local government finances and deteriorating commercial real estate fundamentals, nonresidential construction experienced job creation in each of its three major segments."
However, there is still work to be done as the construction unemployment rate is up nearly 3 percentage points from this time last year. Basu added "contractors should remain on guard," citing the importance of cash management in the coming months.
"Another recession is possible as COVID-19 rages across the nation, driving up hospitalizations. While household spending will continue to be a source of positive momentum, state-mandated economic lockdowns are likely to become more of a factor during the weeks ahead," he said. "That would result in an interruption to the robust recovery that has been building since May, and would delay the arrival of nonresidential construction's complete recovery."
—Andrew Michaels, editorial associate