Residential construction jobs increased 2.2% in March from a year earlier, another indication of the small gains the US housing market is showing as the spring home-buying season approaches, according to government data.
Since the beginning of the year, the market has shown a slight uptick of 0.2% in seasonally adjusted residential construction jobs, as new dwellings rose during the first months of 2023, data from the US Bureau of Labor Statistics showed. Meanwhile, residential skilled trades jobs increased 1.1% from March 2024, according to the data.
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- Residential construction jobs increased 2.2% from a year ago, which is a small indication of springtime improvements in the US housing market.
- Jobs increased slightly from the start of the year, an increase of 0.2%.
- Residential skilled trades jobs increased 1.1% year-over-year.
This news comes along with reports of high fluctuations in job openings, minimal growth in new home sales and delayed starts in single family homes. The gap between single-family home constructions and home configurations grew to 6.5 million between 2012 and 2024. Last year, an additional 2.1 million households were built, while homebuilders began building about 1 million single-family homes.
Although it is typical to see declines in construction jobs during the winter, the industry, especially residential home construction, is being affected by the Federal Reserve’s rate hikes designed to curb inflation.
“The March employment report may indicate growing economic weakness in the coming months,” said Anirban Basu, chief economist at Associated Builders and Contractors. While the non-residential construction industry lost fewer than 2,000 jobs, the addition of jobs in publicly funded construction categories further masks significant vulnerability in the private sectors. It is the private sectors that tend to be hardest hit by slowing economic growth, deteriorating confidence and concerns about the country’s banking system.
Government data from January showed an almost 50% month-over-month decline in construction jobs, the largest monthly decline ever in construction jobs since data collection began more than 20 years ago. Job openings recovered in February, according to an analysis of BLS data from ABC. Openings increased by 129,000 in February, but are still down 9,000 from the same period last year.
Industry experts point to the delayed effects from the Fed’s rate hikes as an explanation for why the drop was so sharp after jobs surged during the winter.
“As the nation continues to advance economically, the headwinds are increasing,” Basu said. Recession remains a likely outcome over the next 12 months. Contractors generally report a healthy backlog and confidence in relation to the next six months, but the industry may be positioned to face significantly weaker conditions in 2024.”
Experts point to other market conditions, such as higher mortgage rates and rising prices as further signs that pent-up market demand may be fading later in the year. Building confidence increased in March, according to the National Association of Home Builders, although the outlook remains unclear.
Market confidence for newly built single-family homes rose by two points in March, marking the third consecutive monthly increase in building sentiment levels.
“Even as builders continue to grapple with soaring construction costs and materials supply chain disruptions, they continue to report strong pent-up demand as buyers wait for interest rates to drop and head more into the new domestic market due to a shortage of housing,” said Alicia Huey, president of the National Association of Home Builders. , a builder and developer of custom homes from Birmingham, Ala.” “But due to recent instability concerns in the banking system and fluctuations in interest rates, builders are largely unsure about their near and medium-term outlook.”