Construction hourly pay up 5.2% as October's jobseeker pool hits its lowest since 2018

Here's the number that explains construction pay right now: 363,000. That's how many unemployed jobseekers with recent construction experience there were in October, according to the Associated General Contractors of America's analysis of federal data released on 6 November. It's the lowest October total since 2018.

Their unemployment rate was 3.6% (not seasonally adjusted). AGC says that ties 2018 for the lowest October rate in the series' 27-year history.

What it's doing to pay

With fewer people available, pay is moving. Average hourly earnings for construction production and nonsupervisory employees, broadly the hourly field workforce, reached $39.70 in October. AGC says that's 21.2% more than the $32.75 average for production workers across the private sector.

Over the past year, construction hourly pay for that group rose 5.2%, against 3.3% for private-sector production workers as a whole.

"Nonresidential contractors are adding employees and raising hourly pay at rates far exceeding the broader economy," said Ken Simonson, AGC's chief economist.

Simonson added that keeping those gains going will be hard unless contractors can bring in workers with the right experience and training.

Two measures, one direction

Associated Builders and Contractors reports a slightly different figure from the same release: average hourly earnings for construction up 4.7% year on year, against 3.1% for all industries. The two aren't measuring quite the same group: AGC's 5.2% is for production and nonsupervisory employees only. The BLS jobs report put average hourly earnings for all private nonfarm employees at $38.00, up 3.1% over the year.

Either way, construction pay is rising faster than pay across the wider economy.

That sits a little awkwardly next to the Employment Cost Index we covered last week, which showed construction wage growth cooling to 3.0% over the year to September. The ECI and average hourly earnings are built differently, so they won't always agree. Even there, BLS figures show the construction, extraction, farming, fishing and forestry occupational group running hotter than the industry average, at 3.8%.

What the industry is asking for

AGC's answer to the shortage is mostly about supply. Association officials called for more funding for career and technical training, a way for contractors to sponsor qualified workers from outside the US, and a new highway and transit funding bill before federal funding runs out in December.

Why this matters for TA

When the pool of available people is at its smallest October level since 2018, the people you want are mostly in work. That changes the maths on offers. A pay rise that keeps pace with the market is a retention tool, and an offer that only matches someone's current rate is unlikely to move them.