Contractors Raising Pay Faster Than Other Industries to Fill Job Openings

Hourly earnings in construction are rising faster than the 2.5% increase for all private sector workers and are now nearly 10% higher than the private sector average of $26.00 per hour

Feb 9, 2017

Average hourly earnings in construction increased 3.2% over the past year to $28.52 per hour.

Construction employment increased by 36,000 jobs in January to the highest level since November 2008 as employers increased pay in an effort to address a chronic worker shortage, according to an Associated General Contractors of America analysis of new government data. The association urged public officials to strengthen training and education programs to prepare more workers for careers in the high-paying construction field.

“This report aligns with what contractors have been telling the association — that the construction industry is still eager to add workers,” said Ken Simonson, the association's chief economist. “The employment gains would be even larger if there were enough workers with the right skills available to hire.”

Construction employment totaled 6,809,000 in January, an increase of 36,000 from the upwardly revised December total and an increase of 170,000 or 2.6% from a year ago. Average hourly earnings in construction increased 3.2% over the past year to $28.52 per hour. Hourly earnings in construction are rising faster than the 2.5% increase for all private sector workers and are now nearly 10% higher than the private sector average of $26.00 per hour, Simonson noted.

In a survey that the association released in January, 73% of the 1,281 participating contractors said they planned to add to their headcount in 2017. But an equally high percentage said they were having trouble filling hourly or salaried positions. End-of-month openings in construction have been at 17-year highs, according to recent government data, Simonson added.

Residential construction — comprising residential building and specialty trade contractors — added 20,300 jobs in January and 128,200, or 5%, compared to a year ago. Nonresidential construction (building, specialty trades, and heavy and civil engineering construction) employment increased by 14,900 employees in January and 41,600 employees, or 1% over 12 months.

Association officials noted that both their survey and government data released earlier this week point to continued growth in construction activity and an eagerness by contractors to hire — if they can find qualified workers. The association urged lawmakers and government officials to expand and fund employment and training programs to equip students and workers with the skills needed to become productive construction employees.

“Contractors have the ‘help wanted’ signs out and are offering good pay and benefits,” said Stephen E. Sandherr, the association’s chief executive officer. “We need government at all levels to revitalize and better fund programs to educate and train the next generation of construction craft workers.”