Construction employment increased by 38,000 jobs in December and by 280,000 jobs for the year, or 4%, according to the latest U.S. Department of Labor jobs report. The construction industry's average pay accelerated and unemployment decreased to a historic low, according to an analysis of government data by the Associated General Contractors of America.

The report also shows the economy added 32,000 manufacturing jobs in December, bringing the total 2018 manufacturing tally to 284,000, capping its best calendar year since 1997, according to the National Association of Manufacturers. Manufacturing added 207,000 jobs in 2017.

"Manufacturing has now averaged nearly 24,000 new jobs per month over the past year, with nearly 90% of firms in our latest survey saying they had a favorable outlook," said Dr. Chad Moutray, chief economist, National Association of Manufacturers. "At the same time, manufacturers are bringing people back into the workforce, and we need this trend to continue. Our industry currently faces a workforce crisis with more than half a million open jobs today, and 2.4 million jobs expected to go unfilled over the next decade. Closing the skills gap continues to be the top challenge facing manufacturers in the United States and is absolutely essential to ensuring that the sector continues to grow.”

Associated General Contractors of America officials added that most construction contractors report they plan to continue hiring in 2019, according to the association's annual outlook that was released earlier this week.

"Demand for construction remains strong across most project types and locations," said Ken Simonson, the association's chief economist. "Job growth and pay increases in construction are outpacing those in the overall economy. But contractors continue to have difficulty finding qualified workers with the number of unemployed workers who have construction experience at the lowest December level in 19 years."

Construction employment totaled 7,352,000 in December, the highest level since March 2008. Employment in residential construction—comprising residential building and specialty trade contractors—inched up by 1,700 jobs for the month and 99,800 jobs over the past 12 months, a 3.6% increase.

Employment in nonresidential construction—including building, specialty trades, and heavy and civil engineering construction—grew by 35,800 jobs in December and grew by 180,100 jobs during the past year, a 4.2% increase, the economist said.

Hourly earnings in the industry averaged $30.44 in December, a rise of 3.9% from a year earlier, Simonson said. Average hourly earnings in construction are now 10.8% higher than the average for all nonfarm private-sector jobs, which rose 3.2% in the past year, to $27.48.

The unemployment rate for job seekers with construction experience in December was 5.1%, down more from 5.9% in December 2017. The number of such workers fell to 493,000 from 554,000 a year earlier. Both figures were the lowest for December since the series began in 2000.

In a survey, 79% of construction firms reported that they expect to add employees in 2019. However, nearly as many—78%—reported they were having trouble filling some positions and 68% said they expected that hiring would remain difficult or become harder. Association officials cautioned, however, that contractors' expansion plans could be undermined if Washington officials fail to make new investments in infrastructure or resolve trade disputes, particularly with China.

"Contractors are raising pay and benefits and are investing in training and technology in order to keep pace with demand," said Stephen E. Sandherr, the association's chief executive officer. "But they are also counting on Washington officials to work together to improve aging and over-burdened infrastructure and resolve trade concerns to ensure the economy continues to expand."

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