Officials from Associated Builders and Contractors (ABC) recently announced that the construction industry will need to attract an estimated 546,000 additional workers in 2023 to meet the demand for labor.
According to ABC’s data, sourced from the U.S. Census Bureau’s Construction Put in Place survey and the U.S. Bureau of Labor Statistics, the construction industry averaged more than 390,000 job openings monthly in 2022. The industry’s 2022 unemployment rate was 4.6%, the second lowest on record.
Despite those numbers, ABC officials say the industry suffers from a lack of incoming workers and increased demand.
“Despite sharp increases in interest rates over the past year, the shortage of construction workers will not disappear in the near future,” says Anirban Basu, ABC’s chief economist. “First, while single-family home building activity has moderated, many contractors continue to experience substantial demand from 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 a construction labor shortage and a skills shortage.”
Basu adds the age of workers is impacting the workforce. He says that nearly one in four construction workers are older than 55, which will “whittle away at the construction force.”
“Many of these older construction workers are also the most productive, refining their skills over time,” he says. “The number of construction laborers, the most entry-level occupational title, has accounted for nearly four out of every 10 new construction workers since 2012.”
ABC officials say that the industry will need to bring in more than 342,000 new workers in 2024 on top of normal hiring to meet industry demand, and that’s presuming that construction spending growth slows significantly next year.