A new survey by the Associated General Contractors of America (AGC) shows that 70 percent of construction companies are having a hard time finding qualified workers, and 67 percent say the difficulty will continue or worsen during the next year.
“In the short-term, fewer firms will be able to bid on construction projects if they are concerned they will not have enough workers to meet demand,” said Stephen Sandherr, AGC chief executive officer. “Over the long-term, either construction firms will find a way to do more with fewer workers or public officials will take steps to encourage more people to pursue careers in construction.”
The industry-wide survey, conducted by more than 1,600 construction firms, showed 70 percent of firms said they are having difficulty filling hourly craft positions. Craft worker shortages are the most severe in the West, where 75 percent of contractors are having a hard time filling those positions, followed by the Midwest where 72 percent are having a hard time finding craft workers, 70 percent in the South and 63 percent in the Northeast.
According to Sandherr, the five toughest craft positions to fill are: carpenters, brick layers, electricians, concrete workers and plumbers.
The labor shortages come as demand for construction continues to grow. Sandherr notes that construction employment expanded in 258 out of 358 metro areas that the association tracks between July 2016 and July 2017, according to a new analysis of federal construction employment data the association also released today. Growing demand for construction workers helps explain why 67 percent of firms report it will continue to be hard, or get harder, to find hourly craft workers this year.
The survey, which was released by Autodesk and AGC, also discovered that many firms are changing the way they operate, recruit and compensate. AGC officials said that chronic labor shortages could have substantial economic impacts if there aren’t greater investments in career and technical education.
According to Sandherr, firms are changing not only the way they operate, but also how they recruit and compensate workers. Most contractors report they are making a special effort to recruit and retain veterans (79 percent); women (70 percent) and African Americans (64 percent). Meanwhile, half of construction firms report increasing base pay rates for craft workers because of the difficulty in filling positions. Twenty percent have improved employee benefits for craft workers and 24 percent report they are providing incentives and bonuses to attract workers.
Forty-six percent of firms also report they are doing more in-house training to cope with workforce shortages while 47 percent report they are increasing overtime hours and 41 percent are increasing their use of subcontractors. Also, 22 percent report they are increasing their use of labor-saving equipment, 11 percent are using offsite prefabrication and 7 percent are using virtual construction methods like Building Information Modeling, or BIM for short.
“The ongoing labor drought continues to put pressure on the already high-risk, low-margin construction industry,” said Sarah Hodges, director of the construction business line at Autodesk. “As labor challenges continue to grow, technology will play an increasingly important role supporting the existing workforce while inspiring the next generation of industry professionals.”
Sandherr called on federal, state and local officials to act on the measures in the association’s Workforce Development Plan to address the growing worker shortages. In particular, he urged the Senate to pass legislation to reform and increase funding for the Perkins Career and Technical Education Act.
On top of the shortage, hurricane recovery efforts in Texas will likely divert workers from projects in Texas and other states, said Ken Simonson, the group’s chief economist, on a conference call. “It’s certainly going to exacerbate the workforce shortage.
“Workers will be diverted from other projects. There will be a lot of urgent demands for workers to repair and stabilize – and start replacing some of the damaged infrastructure and building.”