Despite Massive Unemployment, Construction Still Struggles to Fill Job Vacancies

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Robison Wells

In a year that has seen massive layoffs and millions of people looking for work, you'd think that construction—an industry that has historically suffered from significant labor shortages—would fill vacancies with the flood of unemployed workers. Construction companies have found increasing difficulty hiring skilled laborers.

According to the 2020 Marcum JOLTS Analysis of construction data, construction jobs alone dropped 195,000 in December, accounting for approximately 3% of available construction positions.

Further, construction hiring managers fight skyrocketing wages. In January 2021, an average construction worker made $32.11 per hour. On top of that, hours worked increased to levels not seen since 2019.

"This is what might be expected from a strong economy operating under normal circumstances, not one facing a lingering pandemic and elevated unemployment," wrote Anirban Basu, author of the report and Marcum's chief construction economist.

When the pandemic hit, construction companies laid off or furloughed more than 600,000 workers, over 50% more than the hit taken in the wake of the 2009 housing bubble. By April, things had declined even further with the loss of another 700,000 workers—10.8% of all American construction workers.

The Marcum JOLTS Analysis doesn't paint a rosy picture for a human resource rebound.

"When the pandemic began, some thought (and hoped) that the massive job losses observed in March and April would mitigate the skilled labor shortages that have frustrated construction firms for years," wrote Basu. "That simply hasn't happened to any meaningful degree."

"According to the Census Bureau, more than 60% of construction workers who lost their jobs during the Great Recession left the industry permanently by 2013," the report says. "Many of these workers found positions in other industries, while others retired altogether."

With no upward turn in the foreseeable future, a shortage of skilled workers threatens to slow construction projects and increase American building costs.

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