The number of open construction jobs declined significantly in October, as both hiring and layoffs saw notable drops. According to data released by the Bureau of Labor Statistics (BLS) on Tuesday, open construction jobs fell by 164,000, or about 40%, compared to the same month in 2023. The month also saw a drop of 9,000 open positions, or approximately 3.5%, from September.

This decline follows a reduction of 70,000 open jobs from August to September. The BLS report measures the number of unfilled positions for which employers were actively hiring on the last day of the month.

“While JOLTS data can be volatile from month to month, especially at the industry level, the decline in unfilled construction positions is undeniable over the past few quarters,” said Anirban Basu, chief economist for Associated Builders and Contractors. “On average, just 3.4% of industrywide positions were open over the past six months, the lowest rate since 2020.”

Possible Reasons for Decline

Several factors may have contributed to the ongoing decline in open positions, according to economists.

“There’s reason to suspect that election uncertainty, combined with the expectation that borrowing costs will decline over the next several quarters, delayed staffing decisions over the past few months,” Basu explained.

Basu also noted that hiring in October was at its lowest level since 2020, while layoffs fell to their smallest number on record for the month. Construction employers laid off 97,000 workers in October, which was 43% fewer than the previous month and down 42% compared to the same time last year. Meanwhile, contractors hired 293,000 workers in October, a 12.5% decline from September and a 23% decrease year over year.

Despite these drops, Basu pointed out that industrywide employment growth has still outpaced the broader economy in recent quarters. Based on ABC membership surveys, contractors expect to increase staffing in the next six months, suggesting that job openings in construction could rise again early in 2025.

Residential Sector Contributes to Job Openings Decline

The slowdown in the residential construction sector has also been largely attributed to the recent drop in open construction positions. While BLS data doesn’t distinguish between residential and nonresidential job openings, economists suggest the residential sector has been particularly impacted.

Macrina Wilkins, senior research analyst for the Associated General Contractors of America, highlighted that nonresidential firms experienced a 3.7% increase in employment in October compared to the same month in 2023, nearly three times the growth seen in the residential sector. Nonresidential employment has maintained a steady growth rate of 3.5% to 4% over the past two years, while residential employment has gradually slowed.

“These trends suggest that the recent decline in job openings is primarily concentrated in the residential construction sector,” Wilkins stated.