Three out of Four Metros Added Construction Jobs in Past Year, But Nationwide Shortage of Skilled Workers Has Raised the Cost of Construction and Delayed Project Schedules, Putting Broader Economic Growth at Risk
Eighty percent of construction firms report they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce, according to the results of an industry-wide survey released today by Autodesk and the Associated General Contractors of America (AGC). Association officials said shortages pose a significant risk to future economic growth and they released a new workforce development plan to solve the growing problem.
“Labor shortages in the construction industry remain significant and widespread,” said Ken Simonson, AGC’s chief economist. “The best way to encourage continued economic growth, make it easier to rebuild aging infrastructure and place more young adults into high-paying careers is to address construction workforce shortages.”
Of the more than 2,500 survey respondents, 80 percent said they are having difficulty filling hourly craft positions, Simonson noted. Craft worker shortages are severe in all four regions of the country, with 81 percent of contractors in the West and South reporting a hard time filling hourly craft positions, almost identical to the 80 percent rate in the Midwest and 77 percent rate in the Northeast.
The labor shortages come as demand for construction continues to grow. Simonson noted that construction employment expanded between July 2017 and July 2018 in 281 out of 358 metro areas that the association tracks—more than three out of four—according to a new analysis of federal construction employment data the association also released today. Growing demand for construction workers helps explain why 81 percent of firms report it will continue to be hard, or get harder, to find hourly craft workers this year.
“With a rise in the share of firms having trouble finding skilled craft workers, it’s evident that we need to reskill the future workforce,” said Sarah Hodges, senior director, construction business line at Autodesk. “Technology can help bridge this gap, and more firms are bringing training in-house to implement digital strategies such as building information modeling, or BIM, to ease staffing challenges and train the next generation of industry professionals.”
Tight labor market conditions are prompting firms to change the way they operate, recruit and compensate workers, Simonson noted. Sixty-two percent of construction firms report increasing base pay rates for craft workers because of the difficulty in filling positions. Twenty-four percent have improved employee benefits for craft workers and 25 percent report they are providing incentives and bonuses to attract workers.
In addition, 25 percent report they are increasing their use of labor-saving equipment and an equal percent report using virtual construction methods such as BIM. However, 47 percent of firms report they have put higher prices on their bids and 44 percent report that already-underway projects cost more because of labor shortages. Forty-six percent report it takes longer than originally scheduled to complete projects and 27 percent report they are putting longer completion times into their bids because of workforce shortages.
The association also released a new Workforce Development Plan that identifies steps federal officials should take to support construction workforce development, including doubling the funding for career and technical education over five years and allowing more people with construction skills to legally enter the country. The plan also outlines new recruiting steps the association is taking, including launching a targeted digital advertising recruiting campaign and investing in innovative workforce solutions.