Residential Firms Shed 7,500 Positions In May, Limiting Overall Jobs Gain to 4K

 

The Bureau of Labor Statistics’ May 2025 jobs report, released June 6, was a case of good news and expected bad news for contractors, the latter the result of waning residential construction activity.

Non-residential contractors provided the good news, filling an estimated 11,300 new positions overall, with nonresidential building contractors adding 3,100 positions, heavy and civil engineering firms adding 3,700 jobs, and nonresidential specialty firms hiring an estimated 4,500 workers during May.

Meanwhile, firms working in the residential construction sector cut approximately 7,500 jobs, according to the report. That overall decline resulted from residential specialty trade firms cutting 11,000 positions, while residential building contractors added 3,600 workers.

In a press release, Anirban Basu, chief economist for Associated Builders and Contractors, noted the job report’s good news-bad news nature by first noting that “The nonresidential construction segment has now added jobs at over twice the pace of the broader economy during the past 12 months.”

At the same time, Basu observed that, “Despite healthy nonresidential hiring, the broader industry has added just 25,000 jobs from January to May.”

“That marks the slowest five-month employment growth since 2020 and provides a clear indication that high interest rates, tight lending standards and policy uncertainty are weighing on industrywide momentum,” he added.

In its news release on the monthly jobs report, he Associated General Contractors of America noted that, overall, the construction industry has added jobs every month for more than a year.

However, AGC’s Chief Economist Ken Simonson stated that “Constant changes in tariffs and other policies that are affecting the cost and demand for construction have led to a significant slowdown in hiring.”

Jeffrey D. Shoaf, AGC’s chief executive officer, added, “Construction firms continue to hire and boost wages, but the pace of growth has slowed as demand for certain types of projects cools. As federal officials provide more certainty about tariffs, taxes and investment levels, demand for projects is likely to rebound.”

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