US construction layoffs hit 99,000 in August, lowest since 2000

US contractors laid off 99,000 workers in August, a drop of nearly 46% from the same month a year earlier and the lowest figure since the Bureau of Labor Statistics began reporting job openings data in December 2000, according to Anirban Basu, chief economist for Associated Builders and Contractors.

The BLS Job Openings and Labor Turnover Survey, released Tuesday, counted 251,000 open construction jobs on the final day of August. Open positions for which contractors were actively hiring fell 48,000 month over month but rose 38,000 year over year. At the end of August, 2.9% of all construction jobs sat unfilled — the highest share of openings since March, Basu said.

For the individual worker, the signal is unambiguous. Contractors are holding onto the people they already employ with unusual determination, and construction unemployment stood at a record-low 3.1% in August. If you hold an in-demand trade credential, your bargaining position is strong and getting stronger; if you are an employer, the same numbers describe a hiring problem that shows no sign of easing.

A split market, not a uniform one

The BLS data indicates that demand for and supply of construction workers have both decreased — a combination that at first glance seems contradictory. Basu resolves the tension by pointing to the sector's internal divide.

"These dynamics may seem contradictory but are consistent with ongoing weakness in the residential segment coupled with booming data center activity and the resulting scarcity of certain skilled trades workers," Basu said in an ABC analysis of the data.

That split matters for anyone weighing a move. Residential-side weakness and data center-driven demand for electricians and HVAC workers produce very different market conditions depending on specialty — a macro average that looks flat conceals sharp divergence at the role level.

Nonresidential builders said they would likely increase staffing levels over the next six months, according to ABC's Contractor Confidence Index. On that basis, Basu predicted labor costs will continue to surge, especially for in-demand occupations such as electricians and HVAC technicians.

Retention over recruitment

Macrina Wilkins, director of market insights for the Associated General Contractors of America, has said for several months that firms are desperate to keep the workers they have while monitoring the market for a potential shift in the availability of new workers.

"The combination of an all-time low layoff rate and an increase in the job openings rate suggests contractors are still eager to maintain or increase their current headcounts," Wilkins told Construction Dive via email. "Firms still have positions they need to fill but are having difficulty matching those openings with qualified workers."

The low hiring rate in the August data adds another layer. Ordinarily, weak hiring signals weak demand for labor. Here, it more likely reflects the difficulty contractors face in finding qualified candidates — a constraint Wilkins tied to two forces: heightened immigration enforcement and construction unemployment of 3.1%, the lowest on record.

"While a low hiring rate often suggests a lack of current demand for workers, in this case it may also reflect the difficulty contractors are having finding qualified employees at a time of heightened immigration enforcement and a record-low unemployment rate for construction workers of 3.1% in August," Wilkins said.

With nonresidential firms planning to add staff over the next six months and the pool of available tradespeople effectively exhausted, Basu expects labor costs — particularly for electricians and HVAC workers — to keep climbing through the coming quarters.