A Look at Construction Labor for Q1 of 2022
Labor markets continue to present challenges, and the effects are being felt across many sectors of the economy. In the construction industry, employment is nearing pre-pandemic levels, while demand for architectural work and construction is growing.
The numbers may indicate that full recovery is within reach, but many general contractors are still struggling to fill the more skilled positions for their construction projects.
YEAR-OVER-YEAR CONSTRUCTION LABOR TRENDS
From September of 2020 to September of 2021, the construction unemployment rate dropped from 7.1 percent down to 4.5 percent. This decrease in the construction industry is slightly larger than the overall unemployment rate, which dropped from 8.3 percent to 6.3 percent over that same time period.
LACK OF WORKERS TO FILL CONSTRUCTION JOBS
Despite construction unemployment numbers dropping, many general contractors are having trouble finding skilled workers to round out their crews. However, many construction firms are filling their vacancies for laborers, which is at least one encouraging sign.
The causes for the skilled-worker shortage have ranged from early retirements during the pandemic and the scarcity of younger workers to fill that gap, to the prevalence of unemployment insurance supplements. Others are just leaving the construction industry altogether, seeking different lines of work.
THE EFFECTS OF CONSTRUCTION LABOR SHORTAGES
Just under 90 percent of construction firms reported project delays. More than sixty percent of those firms are attributing those delays solely to a shortage in the workforce. Not only is the construction industry experiencing a labor shortage, but so are the industries upon which they rely to source their building materials. This is causing longer lead times on those materials and overall delays on construction projects.
To combat this issue, it is necessary for many general contractors to seek other, more creative solutions. Many contractors have increased their pay to attract better talent and created more extensive training and mentorship programs in order to retain that talent.