New Report Shows Construction Workforce Shortage Will Top Half a Million in 2023
According to a recent analysis by Associated Builders and Contractors (ABC), the construction industry is facing a challenging labor outlook. In order to meet demand, contractors will need to hire an estimated 546,000 workers in 2023, in addition to their normal pace of hiring.
In 2022, the industry experienced its highest level of job openings on record, averaging over 390,000 per month. Despite this, the industry’s unemployment rate was the second lowest ever at 4.6%, indicating a scarcity of available workers. Additionally, ABC predicts that for every $1 billion in new construction spending, there will be a need for an additional 3,620 new jobs, on top of the already high number of job openings.
“The construction industry must recruit hundreds of thousands of qualified, skilled construction professionals each year to build the places where we live, work, play, worship, learn and heal,” said Michael Bellaman, ABC president and CEO. “As the demand for construction services remains high, filling these roles with skilled craft professionals is vital to America’s economy and infrastructure rebuilding initiatives.”Associated Builders and Contractors
Construction Labor Shortage Not Affected by Rising Interest Rates
“Despite sharp increases in interest rates over the past year, the shortage of construction workers will not disappear in the near future,” said ABC Chief Economist Anirban Basu. “First, while single-family home building activity has moderated, many contractors continue to experience substantial demand from a growing number of mega-projects associated with chip manufacturing plants, clean energy facilities and infrastructure. Second, too few younger workers are entering the skilled trades, meaning this is not only a construction labor shortage but also a skills shortage.”
Aging Workforce is a Major Factor in Construction Workforce Shortfalls
Nearly 25% of construction workers are over the age of 55, which means that retirements will continue to deplete the construction workforce. Many of these older workers have developed refined skills over time and are among the most productive. Since 2012, almost 40% of new construction workers have been laborers, which is the most entry-level occupational title. However, the number of skilled workers has grown at a slower pace or, in some cases like carpenters, has declined. Companies need to be pro-active and address these critical vacancies by recruiting, educating, and enhancing the skills of the construction workforce through apprenticeship programs.
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