Construction Unemployment Improves in 35 States as Rate Falls to Lowest Ever for August

WASHINGTON —The not seasonally adjusted (NSA) national construction unemployment rate was 4.7 percent in August, down 0.4 percent from a year ago and the lowest August rate on record, the U.S. Bureau of Labor Statistics (BLS) reported. Unemployment rates were also down in 35 states on a year-over-year basis, according to an analysis released today by Associated Builders and Contractors (ABC). Rates rose in nine states and were unchanged in six. Further, the construction industry employed 206,000 more workers than in August 2016.

Because these industry-specific rates are not seasonally adjusted, national and state-level unemployment rates are best evaluated on a year-over-year basis. Note that the data for these measures were collected before Hurricane Harvey struck Texas or Hurricane Irma struck Florida. Therefore these unemployment rates do not reflect the impact of the hurricanes on the U.S. economy or the states that suffered hurricane damage. Expect those effects to be evident in next month’s report.

“The August drop in construction unemployment rate for the nation and most states is a welcome sign that July’s upward blip in rates was temporary. However, we will need to keep an eye on the impact on construction from the recent hurricanes,” said Bernard M. Markstein, Ph.D., president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “The workers for hurricane recovery will be drawn from a workforce already stretched thin from existing projects. In particular, there already is a shortage of skilled workers. The recovery process will re-emphasize the need to recruit young people to the industry and train them.”

From the beginning of the data series in 2000 through 2016, the monthly movement in the national NSA construction unemployment rate from July to August has been a decrease eight times, an increase eight times as well and unchanged once. This year, the rate decreased 0.2 percent from July. Among the states, 28 had decreases in their August estimated rate from July, 19 were up and three saw no change.

Image courtesy Associated Builders and Contractors

Image courtesy Associated Builders and Contractors

The Top Five States: The states with the lowest estimated NSA construction unemployment rates in order from lowest rate to highest were:
Idaho and North Dakota (tied), 1.9 percent
Colorado, 2 percent
Wyoming, 2.1 percent
Hawaii, 2.8 percent

Three states—Colorado, Idaho and North Dakota—were also among the top five in July. Idaho and North Dakota had the lowest rate among the states. For Idaho, this was an improvement from third lowest in July and its lowest August rate on record. Meanwhile North Dakota held on to its number one position from July.

Colorado slipped from second place in July to third place in August. Nonetheless, it was the state’s lowest August estimated rate on record. Wyoming and Hawaii ranked fourth and fifth lowest in August, respectively. Both were up from tied for 13th lowest in July. For Hawaii, it was the state’s lowest August rate on record. Note also that Hawaii’s unemployment rate is a rate for construction, mining and logging combined. The data to estimate a construction unemployment rate alone are not available for the state (and Delaware as well).

Wyoming had the fifth largest year-over-year decline, down 1.6 percent. Hawaii tied with Florida for the eighth largest year-over-year decrease, down 1.1 percent. New Hampshire, which had the fourth lowest rate in July, dropped to eighth lowest in August with a 3.4 percent rate. Still, it was the state’s second lowest estimated August rate on record after the 3.3 rate in 2004.

Vermont, which had the fifth lowest rate in July based on revised data (previously reported as the sixth lowest rate), was sixth lowest in August, tied with Massachusetts, with a 3.2 percent rate. It was the state’s second lowest estimated August rate on record behind the 2.4 percent rate in 2004. South Dakota, which had the sixth lowest rate in July based on revised data (previously reported as the fourth lowest rate, tied with New Hampshire), dropped to near the middle of the pack—the 20th lowest rate (4.2 percent), tied with Maryland.

The Bottom Five States: The states with the highest NSA construction unemployment rates in order from lowest to highest rates were:
West Virginia, 6.5 percent
Illinois, 6.7 percent
Pennsylvania, 6.9 percent
New Mexico, 8 percent
Alaska, 8.3 percent

Three of these states—Alaska, New Mexico and Pennsylvania—were also among the five states with the highest construction unemployment rates in July. Alaska had the highest estimated NSA construction unemployment rate in the nation in August after having the second highest rate in July.

New Mexico had the second highest rate in August, a slight improvement from the highest rate in July. However, the state’s 2.3 percent drop from July was the second largest monthly decrease among the states after Rhode Island’s 2.4 percent reduction. The year-over-year decline of 1.4 percent was the sixth largest in the country (tied with Nevada). The August rate was also New Mexico’s lowest estimated construction unemployment rate since December 2014’s 7.9 percent rate. Note that for the last two years New Mexico’s economy has struggled with an overall unemployment rate that was among the nation’s highest.

For the second consecutive month, Pennsylvania had the third highest estimated NSA construction unemployment rate. Nevertheless, it was the state’s lowest August construction unemployment rate since the 6.3 percent in August 2007. Illinois had the fourth highest construction unemployment rate in August compared to seventh highest in July. It was the state’s lowest August construction unemployment rate since the 6.6 percent in August 2004.

West Virginia had the fifth highest rate in August. In July, the state tied with Illinois for seventh highest construction unemployment rate. The August estimate was the state’s lowest August rate since 2008’s 5.2 percent. Connecticut, which tied with Pennsylvania for the third highest rate in July based on revised data (previously reported as the fourth highest rate), improved to sixth highest rate in August with a 6.2 percent rate. This rate, along with the same August rate last year, was the state’s lowest August NSA construction unemployment rate since the 5.7 percent rate in August 2004.

Mississippi, which had the fifth highest rate in July, improved markedly to the 18th highest rate in July with a 5.1 percent rate. It was the state’s lowest August estimated NSA construction unemployment rate on record. The sharp decline of 1.8 percent from July was the third largest monthly decline in the country.

To better understand the basis for calculating unemployment rates and what they measure, see the article Background on State Construction Unemployment Rates here.

- Associated Builders and Contractors