According to recently released data from the U.S. Census Bureau, total construction spending in the United States amounted to $917.4 billion during the first six months of 2023. While this total only represents a 2.5% inflation-adjusted increase over the same period in 2022, inflation-adjusted construction spending has increased by over 16.5% from the same period in 2020—when the onset of the COVID-19 pandemic halted economic activity, disrupted supply chains, and dramatically altered spending patterns.
A major portion of this increased construction spending is attributable to heightened investment in the residential housing sector. After over a decade of underinvestment in new residential housing—as a result of the subprime mortgage crisis and housing market crash—new housing starts have steadily increased. And although rising interest rates are taking a toll on the economy as a whole, there have been signs of growth in new housing construction.
Increased spending in the residential housing sector and across the construction industry as a whole also bodes well for construction employment. After a sharp decline during the pandemic where total construction employment sank to 6.5 million, employment in the construction industry has steadily grown. In fact, employment in the sector has surpassed pre-COVID levels, and as of July 2023, there were over 7.9 million people employed in construction, an all-time high.
Demand for construction workers translates to strong wages. The construction industry generally compensates its workers well, especially when considering that few construction occupations require a postsecondary degree. On a national level, full- and part-time wage and salary construction workers earn a median of $50,570 per year, which is about 9% more than the median wage of $46,310 for all occupations.
At the state level, the Midwest is home to some of the highest wages for construction workers after adjusting for cost…
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