The construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor, according to abc.org.
A proprietary model developed by Associated Builders and Contractors uses the historical relationship between inflation-adjusted construction spending growth from the U.S. Census Bureau’s Construction Put in Place survey, as well as payroll construction employment from the U.S. Bureau of Labor Statistics, to convert anticipated increases in construction outlays into demand for construction labor at a rate of about 3,620 new jobs per billion dollars of additional construction spending. The increased demand is added to the current level of above-average job openings; calculations also include projected industry retirements, shifts to other industries and other forms of anticipated separation.
The construction industry averaged more than 390,000 job openings per month in 2022—the highest level on record—and the industry unemployment rate of 4.6% in 2022 was the second lowest on record. National payroll construction employment was 231,000 higher in December 2022 than in December 2021.
“Despite sharp increases in interest rates over the past year, the shortage of construction workers will not disappear in the near future,” said ABC Chief Economist Anirban Basu. “First, while single-family home building activity has moderated, many contractors continue to experience substantial demand from a growing number of 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 not only a construction labor shortage but also a skills shortage.
“With nearly one in four construction workers older than 55, retirements will continue to whittle away at the construction workforce,” Basu continued. “Many of these older construction workers are also the most productive, refining their skills over time. 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. Meanwhile, the number of skilled workers has grown at a much slower pace or, in the case of certain occupations like carpenter, declined.”
