According to a model developed by Associated Builders and Contractors, the construction sector will need to attract approximately 650,000 additional workers on top of the typical hiring rate in 2022 to meet labor demand.
“ABC’s 2022 workforce shortage analysis sends a clear message: the construction industry desperately needs qualified, skilled craft professionals to build America,” stated ABC President and CEO Michael Bellaman.
“The Infrastructure Investment and Jobs Act, which was passed in November, as well as the stimulus from COVID-19 relief, will pump billions of dollars into our nation’s most critical infrastructure, and qualified craft professionals are required to efficiently modernize roads, bridges, energy production, and other projects across the country.” More regulations and less worker freedom make it more difficult to fill these positions.”
ABC’s proprietary model uses the historical relationship between inflation-adjusted construction spending growth from the U.S. Census Bureau’s Value of Construction Put in Place survey and payroll construction employment from the U.S. Bureau of Labor Statistics to convert expected increases in construction outlays into demand for construction labor at a rate of approximately 3,900 new jobs per billion dollars of additional construction spending.
This increasing demand is on top of the already above-average number of employment vacancies.
The model also takes into account predicted industry retirements, moves to other industries, and other types of anticipated separation.
According to historical Census Bureau Job-to-Job movement data, a projected 1.2 million construction employees will leave their positions in 2022 to work in other industries.
This is predicted to be offset by an estimated 1.3 million workers leaving other industries to work in construction.
“Despite sluggish spending growth, the most pressing challenge facing the construction industry is a labor shortage,” ABC Chief Economist Anirban Basu stated.
“After adjusting for inflation, construction spending is likely to have decreased over the last 12 months.” As the infrastructure bill’s expenditure increases, so will construction spending, aggravating the labor supply-demand gap.
“Another source of concern is the 8% decline in the number of construction workers aged 25-54 over the last decade. Meanwhile, the proportion of elderly workers leaving the labor field has increased,” stated Basu.
“According to the Centers for Disease Control and Prevention, the average retirement age in the construction industry is 61, and more than one in every five construction workers is currently over the age of 55.”
“An even more pressing issue is the scarcity of qualified skilled workers,” added Basu.
“Since 2011, the number of entry-level construction laborers has increased by 72.8 percent, while total construction workers have increased by only 24.7 percent.” For comparison, the number of electricians increased by 23.9 percent over same time period, while the number of carpenters decreased by 7.5 percent. Only 2.1 percent more construction managers have been hired. Over the last decade, low-skilled construction laborers have accounted for more than 40% of construction workforce growth, but accounting for only 19% of the workforce.”
“The approximately 650,000 workers required must quickly acquire specialized skills,” Basu said.
“With many industries competing for increasingly scarce labor outside of construction, the industry must take drastic measures to ensure future workforce demands are met.”
To fulfill industry demand in 2023, the industry will need to hire approximately 590,000 more workers on top of typical employment, assuming that construction spending growth slows next year.
“Now is the time to think about a career in construction,” Bellaman says.
“The profession provides competitive wages and numerous opportunities to start and advance in an industry that constructs the places where we work, play, worship, learn, and heal. ABC member contractors use flexible, competency-based, and market-driven education techniques to provide a safe, skilled, and productive construction workforce. This all-of-the-above approach to workforce development has resulted in a nationwide network of ABC chapters and affiliates that provide more than 800 apprenticeship, craft, safety, and management education programs, including more than 300 registered apprenticeship programs in 20 different occupations, to build the people who build America.”
