Construction workforce shortage reaches half a million in 2023
By Catrin Jones16 February 2023
The construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labour, says the Associated Builders and Contractors (ABC).
ABC conducted a proprietary model that uses the historical relationship between inflation-adjusted construction spending growth, taken from the US Census Bureau’s Construction ‘Put in Place’ survey, as well as payroll construction employment sourced from the US Bureau of Labour Statistics, to convert anticipated increases into construction and demand for construction labour.
The construction industry is said to have averaged more than 390,000 job openings per month in 2022, the highest level on record, and the industry unemployment rate of 4.6% in 2022 was the second lowest on record, higher than only the 4.5% unemployment rate observed in 2019.
National payroll construction employment was 231,000 higher in December 2022 than in December 2021.
“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 labour shortage but also a skills shortage.”
In 2024, ABC says that the industry will need to bring in more than 342,000 new workers on top of normal hiring to meet industry demand, and that’s presuming that construction spending growth slows significantly next year.