Construction industry employment reached a five-year high in August as the sector added 20,000 jobs and its unemployment rate fell to 7.7%. According to the Associated General Contractors of America, this is the lowest rate for August in seven years.

“Construction employment growth has been accelerating and is broad-based,” said Ken Simonson, the association's chief economist. “The increase in the past 12 months was the largest since 2006 and was spread among residential, nonresidential building, and heavy construction.” 

Construction employment totaled more than 6 million in August, the highest total since May 2009, with a 12-month gain of 232,000 jobs or 4%, more than double the 1.8% growth rate for total nonfarm employment, Simonson noted. Residential building and specialty trade contractors added a combined 13,200 employees since July and 123,100 over 12 months. Nonresidential building and specialty trade contractors hired a net of 5,500 workers for the month and 76,200 since August 2013. Heavy and civil engineering contractors increased their headcount by 900 in August and 32,400 over the year.

“These job numbers, along with data this week on construction spending in July and reports from the Federal Reserve and the Institute of Supply Management, point to continued recovery by the construction sector,” Simonson commented. “However, the fact that the number of unemployed experienced construction workers is now at the lowest August level since 2007 means more contractors may soon have trouble filling key positions.”

The number of workers who said they looked for work in the past month and had last worked in construction fell to 678,000 in August. That was lower than in any August since 2007, when many contractors were forced to delay projects because they couldn’t find qualified workers.

Even as association officials welcomed the relatively positive employment figures, they noted the data reinforces the findings of a new survey the association conducted with SmartBrief that found two-thirds of contractors are having a hard time finding qualified workers. The same survey also found one-in-four firms have passed on projects because of labor shortages. They urged elected officials to act on the measures the association outlined in its Workforce Development Plan to make it easier to establish career and technical education and training programs.