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Industry Workforce Shortages Loom as Employment Grows

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Construction employers added 15,000 workers to payrolls in February despite harsh winter working conditions, raising industry employment to the highest level since June 2009, according to a recent analysis of new government data by the Associated General Contractors of America.  However, association officials noted that as the industry adds jobs, many firms report they are already having a hard time finding skilled workers.

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“The rate of construction hiring has outpaced job growth in the overall economy for the past year,” said Ken Simonson, the association's chief economist. “During that time, all construction segments have added workers.”

Construction employment totaled 5,941,000 in February, the highest total in 4.5 years and an increase of 152,000 or 2.6% from a year earlier, whereas total nonfarm employment rose by 1.6% over that span, Simonson noted.  Among industry segments, residential construction employers led the way with the addition of 1,700 workers in February and 101,200 (4.8%) over 12 months.

Nonresidential construction added 12,700 employees since January and 50,600 (1.4%) since February 2013.

“While demand for construction employees is rising at a healthy clip, workers are still leaving the industry faster than they are being hired, a dynamic that may result in widespread worker shortages in the near future,” Simonson warned. “In the past four years, nearly a million experienced workers have left the industry for jobs in other sectors, retirement or school. They are no longer available for immediate recall to construction jobs.”

The unemployment rate for workers actively looking for jobs and last employed in construction declined from 15.7% a year earlier to 12.8% last month—the lowest February rate since 2008. Simonson noted that the unemployment rate for construction workers had fallen by more than half since February 2010, when it reached 27.1%. During that time, the number of unemployed workers who last worked in construction declined by 1.34 million, but industry employment increased by only 438,000.

“Because persistently severe winter weather delayed many projects in the past few months, contractors are likely to be posting ‘help wanted’ signs on even more jobsites this spring,” Simonson added. “Multifamily, manufacturing, and oil and gas-related facilities will generate particularly strong demand for workers. Contractors in many regions and specialties may have trouble finding the employees they’ll need.”

Association officials noted that two-thirds of construction firms responding to a recent AGC survey reported having a hard time finding enough qualified workers to fill vacant positions.

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