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After a year of record highs, job openings crashed back to earth for the construction industry in January.
There were 248,000 construction job openings in January, a 49% drop from 488,000 in December, according to the Bureau of Labor Statistics' monthly Job Openings and Labor Turnover Survey, which was released on Wednesday. Construction had the largest decline in job openings of any industry BLS tracks, topping food and hospitality.
“Today’s construction job openings number was simply shocking,” Associated Builders and Contractors Chief Economist Anirban Basu said in a statement.
The January openings figure also represented a 37% drop from the year before. The number of hires inched up by only 3% in January and 20% year-over-year, while the number of total separations rose by 9% monthly and 12% year-over-year. BLS' initial data from a given month is considered preliminary and is often revised a month later.
"Almost one-half of all construction job openings disappeared in a single month," Basu said. "In a nation that is set to rebuild much of its infrastructure and is operating in the megaproject era, including the construction of manufacturing facilities for computer chips, inputs to growing alternative energy industries and electric vehicles, today’s numbers seemingly defy credulity."
Construction labor supply has been considered well short of demand since the development pipeline roared to life after the first months of the pandemic. The monthly average of construction openings last year was 349,000, a record high, according to industry group Associated Builders and Contractors. But since the Federal Reserve began raising interest rates aggressively in the back half of last year, projects have been delayed or canceled all over the country.
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With more uncertainty about what projects will move forward, construction companies are forced to make tough decisions about how much staff to carry. Fed Chair Jerome Powell's comments on Tuesday indicated that such uncertainty is likely to continue or worsen for at least the next few months.
For-sale single-family homes suffer the most direct impacts of higher interest rates, and the rate of construction in the sector has tailed off so dramatically that multifamily now makes up more than half of residential units under construction for the first time on record.
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