Associated Builders and Contractors has released its analysis of the June 2018 construction unemployment figures, and the final report suggests trends that were occurring earlier in the year are continuing. Construction unemployment rose 0.2 percent from June 2017 to June 2018 using numbers not adjusted for seasonal changes in employment. Normally, a rise in unemployment would be a bad economic sign. But as has been the case for the last few years in the construction industry, a rise in unemployment is not necessarily a bad thing.
The rising unemployment numbers in the construction industry are very misleading.
The Unemployment Trend In Construction
Most people associate a rise in unemployment with a drop in revenue or work. When the construction economy started to rebound in 2012, companies had a difficult time finding skilled workers to fill positions because many skilled workers had moved on to other industries after the Great Recession of 2008. At that time, unemployment numbers were low because the resurgence of the construction industry meant work for everyone.
In 2017, contracting revenue in the United States rose 4.9 percent from 2016. While that rise represented one of the lowest increases in the previous three years, it was still an indication that the construction industry is growing at a healthy pace. The thing that contributed to slow growth was the lack of labor available for the projects that were starting. The June 2018 unemployment figure is not the result of not enough workers being hired; it is the result of too many workers looking for work while the industry is churning out record revenue numbers. If the construction industry can keep growing and eventually lower unemployment to almost zero, then that would indicate a record revenue year for American contractors.
The Lowest Unemployment Rates
The state with the lowest construction unemployment rate for June 2018 is Idaho at 1.7 percent. Analysts always prefer to use year-over-year numbers to compare unemployment rate movements because those numbers are adjusted for seasonal changes in employment. Idaho actually saw a drop in unemployment of .3 percent from June 2017. Idaho rebounded from having the 12th lowest construction unemployment rate in the country in May 2018 to the lowest in June 2018.
Immediately behind Idaho in the category of lowest unemployment rates for June 2018 are Minnesota and Iowa at 1.9 percent. Both states saw significant drops in unemployment from June 2017 to put them in the second position.
With a growing pool of available workers, now is the time to start your construction business.
The Highest Unemployment Rates
Alaska had spent 10 consecutive months as the state with the highest unemployment rate until Mississippi took that distinction in June 2018 with a whopping 10 percent unemployment rate. Following were West Virginia at 9 percent, Alaska at 8.4 percent, Alabama at 7.6 percent, and Kentucky at 7.4 percent.
The construction industry is actually excited by these unemployment results as they indicate that the availability of laborers can allow more projects to be started. This could mean the beginning of a boom time in the construction industry. If you want to get in on the rising contracting revenues, then start a course with PDH Contractors and get your contracting license today.