2015 Marcum JOLT Survey Analysis Reports Positive Outlook for Construction Hiring
New York City, NY – The Construction Services Practice of Marcum LLP, a top national accounting and advisory firm, today released the results of its third annual analysis of construction industry employment trends, based on the Bureau of Labor Statistics’ Job Openings and Labor Turnover (JOLT) Survey.
Marcum’s 2015 JOLT Survey Analysis found that the construction industry continued its post-recession recovery in 2015 and into January 2016, representing seven consecutive months of job gains for the industry and bringing total construction employment above 6.6 million for the first time since 2008. The construction sector averaged 325,500 hires per month in 2015 after averaging 320,400 hires in 2014. In December, the construction industry hired 314,000 new workers, while industry separations totaled 292,000 for the month.
- U.S. Construction Hires: During 2015’s initial half, unemployment trended lower, eventually reaching 5.5 percent in July, the lowest level since September 2007 when industry unemployment was 53 percent. By December 2015, the construction industry unemployment rate was 7.5 percent. This implies that more people are interested in securing construction work, including dislocated energy workers. In January 2106, unemployment rose yet higher, to 8.5 percent, but weather likely played a role in shaping the data.
- Construction Hiring and Openings: Between June 2014 and November 2015, the respective growth rates of hires and job openings were more or less in line. In December, job openings surged while hiring fell. This suggests that many contractors likely posted job openings in December with the expectation of hiring people in February, March or April. The data stand for the proposition that many construction firms continue to report healthy backlog and will need more human capital to deliver on their commitments.
- Construction Industry Separations: The rate of separations, including workers who voluntarily leave employment or are laid off, has fallen as the economy and the construction industry have recovered. The recent passage of the FAST Act, the first significant highway and infrastructure spending bill authorized since 2009, should serve as further impetus for infrastructure contractors in particular to retain current team members.
According to Marcum’s chief construction economist, Anirban Basu, who authored the report: “Ongoing job growth in professional services should continue to translate into more office construction. Growing demand for primary healthcare will produce demand for construction services at medical centers and in outpatient settings, including at pharmacies and clinics. Leisure and hospitality also continues to be a source of growth in America. That has helped produce more demand for the construction of shopping centers, hotels and restaurants.
“The JOLT Survey is consistent with the notion that construction’s recovery will continue through 2016 and that contractors will continue to hunt for talent. Most economists agree that the chance of near-term recession remains remote. However, clouds are forming in the longer-term forecast horizon. The outlook for 2017 and 2018 is decidedly murkier. The good news is that many construction firms have ample backlog to remain busy. But if the economy truly weakens in 2017, the implication is that backlog will begin to shrink, which may translate into bigger issues for many contractors in 2018.”
Marcum LLP’s Construction Industry group provides strategic and timely accounting, audit, and consulting and taxation services to construction clients ranging from start-ups to multi-billion-dollar enterprises. The Firm’s technical experts serve on many industry boards and committees and regularly contribute to construction conferences and publications.
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