November Construction Unemployment Rate Reaches Lowest on Record

The not seasonally adjusted (NSA) national construction unemployment rate was 5% in November, down 0.7% from a year ago and the lowest November rate on record, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics (BLS) data. The construction industry employed 191,000 more workers than in November 2016. Construction unemployment rates were down in 36 states on a year-over-year basis, unchanged in 13 and up in one state (Missouri).

“Construction employment continues to show strength throughout much of the country, reflecting a healthy construction industry,” said Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “Above-average temperatures and below-normal precipitation in much of country in November likely helped overall construction activity. Continued recovery and rebuilding efforts following 2017’s hurricanes, floods and wildfires has added to demand for workers, offsetting some of the normal seasonal downturn in construction employment.”

Construction unemployment rates were down in 36 states on a year-over-year basis, unchanged in 13 and up in just one state.

Because these industry-specific rates are not seasonally adjusted, national and state-level unemployment rates are best evaluated on a year-over-year basis. The monthly movement of the rates still provides some information, although extra care must be used in drawing conclusions from these monthly movements.

From the beginning of the data series in 2000 through 2016, the monthly movement in the national NSA construction unemployment rate from October to November has increased 13 times, decreased twice and remained unchanged twice. The most recent rate went up 0.5% from October. Among the states, 38 had increases, nine had decreases and three were unchanged (Massachusetts, New York and Utah).

The top five states

The states with the lowest estimated November NSA construction unemployment rates in order from lowest to highest were:

• Hawaii, 2.5%
• Idaho and Utah (tie), 2.9 %
• Massachusetts, 3.1 %
• Colorado, 3.2 %

Four of the top five states were in the top five in October: Hawaii, Colorado, Idaho and Utah.

Hawaii maintained its number-one ranking from October. It was the state’s lowest November rate since the beginning of the estimates in 2000. Further, Hawaii had the second largest year-over-year decrease in its rate among the states (down 2.4%), behind Alabama’s 3.4% drop. Note that Hawaii’s unemployment rate is a rate for construction, mining and logging combined. The data to estimate a construction unemployment rate alone are not available for either Hawaii or Delaware.

Idaho and Utah tied for the second lowest November rate. Idaho held on to its second-place ranking from October while Utah moved up three spots. This was Idaho’s lowest November estimated rate on record. It was Utah’s lowest November rate since 2007’s 2.2% rate.

Massachusetts had the fourth lowest November construction unemployment rate, up from 10th lowest rate in October. It was the state’s second lowest November rate after 2016’s 3% rate.

Colorado had the fifth lowest rate in November, down from third lowest in October. It was the state’s lowest estimated November rate since 2005’s 3.1% and its second lowest November rate on record.

Vermont, which tied with Colorado for third lowest in October based on revised data (previously reported as the fourth lowest rate), fell to 16th lowest in November, with a 4.4% estimated NSA construction unemployment rate. Iowa and North Dakota experienced significant drops from their tie for fifth lowest unemployment rate in October based on revised data. Iowa fell to the 14th lowest unemployment rate at 4.2%, while North Dakota dropped to 39th place at 6.5%. For Iowa, it was the state’s second lowest November rate on record after the 4% rate in November 2016. North Dakota had the second highest monthly and year-over-year increase in its rate in the country — up 3.6% and 1.5%, respectively.

Improvement in construction unemployment rates reflect a healthy construction industry.

The bottom five states

The states with the highest November NSA construction unemployment rates in order from lowest to highest were:

• Connecticut, 7.7%
• Illinois, 8%
• New Mexico, 8.1%
• Montana, 10.3%
• Alaska, 16.3%

Three of these states — Alaska, Illinois and New Mexico — were also among the bottom five states in October.

Alaska had the highest rate in the nation for the fourth consecutive month. Its high construction unemployment rate at this time of the year is not unusual given that these estimates are not seasonally adjusted.

Montana had the second highest construction unemployment rate in November compared to 16th highest in October (tied with Wisconsin). The state had the largest monthly and year-over-year increase in the nation — up 5.2% and 4.1%, respectively.

New Mexico had the third highest estimated NSA construction unemployment rate in November. That was an improvement from second highest in October and its rate was also down 1.3% from November 2016. Also, the rate was the state’s second lowest November construction unemployment rate since the 7.3% rate in November 2008, behind November 2014’s 7.8% rate.

Illinois had the fourth highest rate in November compared to third highest in October. This was the state’s lowest November construction unemployment rate since its 6.8% rate in November 2006.

Connecticut, which had the 12th highest rate in October (tied with Washington state) with a 5.4% rate, had the fifth highest rate in November. It was the nation’s fifth largest monthly increase (up 2.3%) and the fourth largest year-over-year increase (up 1%). Nonetheless, after last year’s 6.7% rate, it was the state’s second lowest estimated November NSA construction unemployment rate since its 7.1% rate in November 2007.  

To better understand the basis for calculating unemployment rates and what they measure, see the article Background on State Construction Unemployment Rates in the State-by-State Construction Economics section at abc.org/economics.