Labor Shortage Will Get Worse, Not Better, Reports Show

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Robison Wells

It’s no secret that the shortage of skilled labor, both in the United States and worldwide, impacts the construction industry. A report released on September 22nd, 2021 by the U.S. Chamber of Commerce states that 92% of contractors experienced “moderate to high levels of difficulty” finding workers. In addition, 93% of contractors expect hiring to become more complex.

In addition, 73% of contractors this quarter said they missed deadlines; this compared to 56% last quarter. In addition, 71% said they had asked their current workforce to work longer hours. Finally, 40% said they have turned down construction jobs because they can’t handle the workload.

“In this industry, regardless of your trade affiliation, the labor shortage is the biggest thing that’s keeping you up at night,” said Brian Sampson, head of the New York chapter of Associated Builders and Contractors (ABC). “Material prices and the ability to get materials will eventually even out, but the labor shortage will continue for quite some time and prevent contractors from delivering projects on time and budget.”

The recession at the beginning of the pandemic caused many problems. Construction companies laid off 1.5 million workers; many haven’t come back to work. Some moved into different fields; others retired.

The AGC in New York reports problems finding labor due to state vaccination mandates. For example, laborers must have vaccination cards to work on public buildings, including schools and hospitals. However, only 57% of construction workers are vaccinated, compared to 80% in other professions.

“You have contractors that are already scrambling to staff projects, and now they have parts of their workforce that can’t work,” Mike Elmendorf of the New York Associated General Contractor of America (AGC) said. “There are some contractors that that’s all they do; they work for the NYC School Construction Authority. So, if you can’t bring an unvaccinated contractor to that job, you have an even bigger workforce problem.”

Pay affects workers’ desire to get back on the job. Construction usually entices entry-level workers with higher pay rates, but growth in hourly wages among other industries decimates the attractiveness of construction salaries.

Only 11 states saw increases in construction jobs from February 2020 to August 2021, primarily in states that gained population during the pandemic, including the Midwest and the Intermountain West.

But for now, hiring can be complicated. Ken Simonson, chief economist of the AGC, says, “The overall share of the population that is either working or looking for work has gone down significantly.”

The labor shortage continues to complicate construction companies’ ability to hire and maintain skilled workers. Many expect gaps in the workforce to worsen before leveling out; this leaves the construction industry with difficult decisions to make in its recruitment efforts.

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