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Construction Firms See Worker Shortage

Thursday, September 12, 2013

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Despite an industry jobless rate still stuck above 9 percent, most construction employers across the United States are reporting trouble finding qualified employees at every level.

Worse, most businesses also expect labor shortages to grow in the coming year, prompting calls for  immigration and education reform to help fill the breach, according to new research by the Associated General Contractors of America.

The most common challenge is filling onsite construction jobs such as carpenters, equipment operators and laborers, employers told AGC in a survey released Sept. 4.

construction workers
Associated General Contractors of America

Of the 74 percent of contractors that are having difficulty finding qualified craft workers, the most frequently reported difficulties are in filling onsite construction jobs, including equipment operators and other laborers.

Meanwhile, 53 percent of companies report difficulty in filling professional positions, including project supervisors, estimators and engineers, the association said.

The surveys, completed by nearly 700 construction companies, were conducted in July and August 2013.

Click here for AGC’s analysis and survey results. View the national results here.

Action Urged

“We need to take short- and long-term steps to make sure there are enough workers to meet future demand and avoid the costly construction delays that would come with labor shortages,” said Stephen E. Sandherr, CEO of the AGC.

Construction wages
Source: Bureau of Labor Statistics

Average hourly earnings for construction trade employees topped the $25 mark in November 2009, but remained fairly flat in 2010 and 2011. In 2013, average wages broke the $26 threshhold in January and have gradually, but steadily, increased throughout the year.

Eighty-six percent of survey respondents said they expected that it would remain difficult or get harder to find qualified craft workers over the next 12 months; 72 percent say the market for professional positions will remain hard or get even worse.

Seventy-four percent of respondents report there are not enough qualified craft workers available to meet future demand, while 49 percent said there weren’t enough construction professionals available, Sandherr said.

August Construction Figures

Construction employment totaled 5,798,000 workers in August, according to the AGC’s analysis of the federal government's newest labor figures.

Meanwhile, the unemployment rate for workers actively looking for jobs and last employed in construction declined from 11.3 percent in August 2012 to 9.1 percent last month—the lowest August rate since 2008.

construction workers
Associated General Contractors of America

Nearly 700 construction companies participated in the survey. Most of the firms are involved in building construction, followed by heavy/industrial construction, highway construction or municipal or utility construction.

“Over the past three years, the number of unemployed, experienced construction workers has dropped by half,” said Ken Simonson, the association’s chief economist.

“Unfortunately, the construction industry has been able to hire only about a third of those workers, while the rest have left construction for other industries, schooling, and retirement or have dropped out of the labor force.

“The recent leveling-off of construction hiring means the industry risks losing more of its experienced workers, setting up a potentially grave shortfall when demand for construction resumes.”

The shortage has driven industry unemployment down and wages up. Average hourly wages for U.S. construction industry workers were $24.90 in August 2008 and remained relatively flat until 2012. In January 2013, the average hourly wage topped $26 for the first time; in August, the average reached $26.27.

Averting Shortages

In addition to wage increases, many contractors report taking other steps to prepare future workers, Sandherr said.

Worker survey
Associated General Contractors of America

He said that 48 percent of responding businesses were mentoring future craft workers, 38 percent were participating in career fairs, and 33 percent were supporting high school-level construction skills academies.

In addition, 47 percent of responding companies are offering internships for construction professionals.

Immigration Changes Urged

Still, Sandherr said, more needs to be done to address labor shortages.

He said Congress needed to remove "arbitrary caps" on construction workers that were included in immigration reform the Senate passed earlier this year.

“Lifting those restrictions will go a long way to ensuring construction jobs left vacant by domestic labor shortages go to workers who are in the country legally,” Sandherr said.

Moreover, he urged elected and appointed officials to do more to ensure that public school students have an opportunity to participate in programs that teach skills like construction.

Sandherr said that skills-based programs offer students a more hands-on way to learn math and science. Such programs have been shown to reduce dropout rates and give students an opportunity to earn the higher pay and benefits that come with construction jobs, the association said.


Tagged categories: Associated General Contractors; Construction; Contractors; Craftsmanship; Industry surveys; Labor; Program/Project Management; Trends

Comment from Tom Schwerdt, (9/12/2013, 10:40 AM)

Basic economics has a solution: increase pay and you will see fewer labor shortages.

Comment from Gary Von Behren, (9/12/2013, 2:42 PM)

The construction industry lost thousands of workers to other industries. These people will probably return to the construction industry if and when it really picks up. In many cases they have taken lower paying but steadier jobs. We were told there was going to be labor shortages before that never materialized. I see this as only an excuse to keep the labor pool diluted and keep construction wages low.

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