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October 2006, Vol. 129, No. 10

Two new construction employment series for specialty trade contractors

Christopher Manning and John P. Mullins

The construction industry is vital to the American economy, with construction expenditures accounting for nearly 9 percent of gross domestic product in 2004.1 Construction is closely integrated with a range of related industries, and it is the principal builder of real estate—one of the Nation’s largest asset classes. Because of the industry’s prominence in the economy, it often serves as a bellwether and is widely watched and measured.

Many kinds of data on the industry are produced, both by government agencies and by private companies and organizations. Monthly estimates of employment, produced by the Current Employment Statistics (CES) program of the Bureau of Labor Statistics (BLS), are an important component of construction industry data.2

The CES survey is a monthly panel survey of more than 160,000 nonfarm businesses representing about 400,000 establishments. CES estimates of employment, hours, and earnings are some of the most timely and sensitive economic indicators published by the Federal Government. CES estimates are organized according to the 2002 North American Industry Classification System (NAICS).3 CES estimates of construction employment are grouped into three large NAICS component industry classifications: Heavy and civil engineering construction, construction of buildings, and specialty trade contractors. All three industries engage, to some extent, in both the residential and the nonresidential markets. Despite this, the NAICS coding system supports residential and nonresidential breakouts only for construction of buildings. No such detail is available for specialty trade contractors, the largest and most dynamic component of the construction industry.

To remedy this limitation, the CES program began producing and publishing employment series for residential specialty trade contractors and non-residential specialty trade contractors in 2005. (Exhibit 1 contrasts the NAICS 2002 classification structure with the new CES publication structure, which includes the additional residential and non-residential groupings.) This was done after research revealed the analytical benefits gained from the breakout.4 This paper explains the methodology behind the research and the results that led to the new construction employment series.

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1 Construction expenditures data are available from the U.S. Census Bureau on the Internet at www.census.gov/const/C30/total.pdf (visited August 2005). Gross domestic product data are from the U.S. Bureau of Economic Analysis. See Table 1.1.5 on the Internet at www.bea.gov/bea/dn/nipaweb/index.asp (visited August 2005).

2 The Current Employment Statistics (CES) program is a monthly survey conducted by State Employment Security Agencies in cooperation with the Bureau of Labor Statistics (BLS). The survey provides employment, hours, and earnings estimates based on the payroll records of business establishments. Employment, as defined by CES, is the number of persons who worked during, or received pay for, any part of the pay period that includes the 12th of the month. The CES survey scope excludes the self-employed, unpaid family workers, and workers in private households and agriculture. The employment statistics for government refer to civilian employees only. For more information on the program’s concepts and methodology, see the BLS Handbook of Methods, Chapter 2, at www.bls.gov/opub/hom/homch2_a.htm. CES data are available on the Internet at www.bls.gov/ces/.

3 The North American Industry Classification System (NAICS) is a six-digit hierarchical coding system that groups establishments into industries based on the activities in which they are primarily engaged. NAICS was developed using a production-oriented conceptual framework under which establishments using similar raw material inputs, similar capital equipment, and similar labor are classified in the same industry. NAICS is a collaborative effort among the United States, Mexico, and Canada and offers industry comparability among the three countries.

4 For detailed analysis on residential and nonresidential construction employment, see John P. Mullins’ article, "Recent employment trends in residential and nonresidential construction," in this issue.

Related BLS programs

National Current Employment Statistics

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