According to the AGC (Associated General Contractors of America), construction employment increased by 14,000 jobs in August and by 177,000, or 2.4%, during the past 12 months. With the number of unemployed jobseekers with construction experience at historic lows, 80% of contractors reported they were having a hard time finding enough qualified hourly craft workers to hire.
The AGC survey found that 91% of respondents expected their firms to hire in the next 12 months, but overwhelmingly, they are finding most craft positions hard to fill. Even as firms are raising pay and benefits, doing more in-house training, and investing in labor-saving equipment, labor shortages are changing the way many firms bid, schedule, and manage their projects.
The 2.4% growth in construction employment between August 2018 and August 2019 was the slowest in more than six years, but that the rate remained well above the 1.4% increase in total nonfarm payroll employment. There were 361,000 unemployed jobseekers who last worked in construction—an unemployment rate of 3.6% for such workers, the second-lowest August levels since the series began in 2000.
Average hourly earnings in construction—a measure of all wages and salaries—increased 2.7% over the year to $30.84. That figure was 9.7% higher than the private-sector average of $28.11. Two-thirds of firms responding to the association’s survey had raised base pay rates for hourly craft workers in the past year because of difficulty in filling positions, while 58% had done so for salaried workers. Many respondents also reported providing incentives, bonuses, and larger contributions to benefit plans.
Association officials said that part of the problem is that the nation’s higher education system does not place career and technical education on an equal footing with traditional college education. For example, federal Pell grants cannot be used for construction-focused training programs offered by community and technical colleges.
Seventy-three percent of firms report it will continue to be hard, or get even harder, to find hourly craft workers during the next 12 months. One reason for their worries is that contractors are skeptical of the quality of the pipeline for recruiting and preparing new craft personnel. Forty-five percent say the local pipeline for preparing well-trained and skilled workers is poor, and 26% say the pipeline for finding workers who can pass a drug test is also poor.
About 29% of firms report they are investing in technology to supplement worker duties. One-fourth of firms report they are using cutting-edge solutions, including drones, robots, and 3D printers. Meanwhile, 23% of firms report they are taking steps to improve jobsite performance by relying on lean construction techniques, using tools like building information modeling and doing more off-site prefabrication.
Even as the industry works to address labor shortages, 44% of firms report they are increasing construction prices and 29% are putting longer completion times into their bids for new work because of the lack of workers, putting future development and infrastructure projects at risk. Association officials called on the federal government to boost funding for career and technical education. They also called on federal leaders to allow more immigrants to enter the country to work in construction, let construction students at community and career colleges qualify for federal Pell Grants, and make it easier for firms to establish apprenticeship and other training programs.
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