Manufacturing, construction jobs grow in August, post-Harvey work on horizon

U.S. hiring slowed a bit in August, but manufacturing and construction jobs turned in a solid month with the housing market on the mend.

The construction industry recorded 28,000 net new jobs last month, bouncing back from a July decline of 3,000 jobs. Manufacturing jobs grew by 36,000, or 10,000 more than the prior month.

Mike Montgomery, a U.S. economist at IHS Markit, said the sharp increases were “largely noise,” but the sectors remain on an upward trajectory.

A seasonal boost in motor vehicles and parts accounted for much of the manufacturing sector’s August growth. The auto industry accounted for 13,700 new jobs at a time when U.S. auto sales have cooled off. Meanwhile, construction activity weakened in the second quarter and into July. The August report indicates that construction jobs are catching up to demand, particularly in homebuilding. Housing starts, or the construction of new homes, remain below historical norms and continue to recover from the recession.

The construction industry also appears to have a busy period ahead in the aftermath of Hurricane Harvey, which officials say affected roughly 100,000 homes in the Houston area.

“Construction got bounced around by weather, but it’s still in an uptrend,” Montgomery said. “Construction employment will get a lift from Harvey, probably into the middle of next year.”

Montgomery also noted that construction activity supports manufacturing jobs. Parts fabrication, which includes products like HVAC ductwork and other building materials, is directly tied to construction. Manufacturing jobs in general are in a strong recovery, he said.

The Trump administration’s pledge to roll back regulations and cut business taxes has raised expectations for job growth, particularly in manufacturing. Factory activity hit a six-year high last month, according to a Friday report from the Institute for Supply Management. Its index rose to 58.8, compared to 56.3 in July, signaling greater expansion in the sector as sales and hiring grow at a faster pace.