US construction pay growth outstrips rest of private sector

Strong demand for construction workers in the US has led to pay growth outstripping the rest of the private sector.

Image: AdobeStock

Average hourly earnings for workers in production and non-supervisory roles increased to US$33.15 last month. That represented a jump of 6.1% on December 2021, according to analysis by the Association of General Contractors (AGC).

The rise exceeded the 5% increase in wages for private sector workers as a whole by more than a percentage point. US construction workers now earn an average of 18.1% more per hour than in the private sector as a whole, according to the AGC.

Construction’s wage increase came as employment in the sector hit a record 7.8 million people (seasonally adjusted) in December 2022.

The high demand for construction workers meant that the unemployment rate among jobseekers with experience in the industry declined from 5% in December 2021 to 4.4% last month. The number of unemployed construction workers also fell by 11%, from 497,000 in December 2021 to 443,000. Last month’s figures were the lowest ever for December, the AGC said.

The AGC’s 2023 Construction Hiring & Business Outlook survey, conducted with Sage, found that 69% of the more than 1,000 construction firms polled expect to increase their headcount in 2023. That compared to only 11% that expected a decrease. However, 80% of firms report having a hard time filling positions.

The AGC called on the US government to work on immigration reform measures that allowed more people with construction experience to enter the country legally.

Ken Simonson, the AGC’s chief economist said, “There are more people working in construction today than ever before, and those figures are likely to continue to increase. But as optimistic as contractors are about 2023, they remain worried about their ability find enough workers amid record-low unemployment.”