Construction Employment Hampered by Labor Shortages

5/10/2024 by Rod Sutton

Two industry groups cited ongoing labor shortages as contributing to ongoing employment gaps. Although the metropolitan areas including Dallas and New York added the most construction jobs in November compared to November 2022, according to the Associated General Contractors (AGC), 23% of metro areas lost jobs in the same period. According to the Associated Builders and Contractors (ABC), nearly half a million job openings were unfilled at the end of November.

ABC cited the U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey in noting that 495,000 jobs were open in construction in November. Openings increased 43,000 from the previous month and 111,000 from the previous year, according to ABC. JOLT defines a job opening as any unfilled position for which an employer is actively recruiting.

“The number of open, unfilled construction positions increased to the highest level since the end of 2022,” said Anirban Basu, ABC chief economist, in a statement. “November’s 5.4% job opening rate is higher than at any point from the start of the data series in 2000 to the end of 2021. Contractors continue to grapple with skilled labor shortages even as the demand for and supply of labor in the broader economy rebalances.

Contractors are facing severe labor shortages in regions that are home to industrial megaprojects,” he said. “Projects in Arizona and South Carolina, for instance, have paused in recent months due to an inability to find enough skilled workers. As construction spending in manufacturing and infrastructure subsectors continues to surge in the coming months, labor shortages should remain a top concern for the construction industry.”

According to AGC, employment fell in 81 metropolitan areas in November, led by Orange-Rockland-Westchester, New York with 5,100 jobs, down 11% from November 2022. Employment grew in 213 metros, or 59%, and stayed level in 64 metropolitan areas.

“Although construction employment is still growing in most parts of the country, it is falling in more places than earlier this year,” said Ken Simonson, AGC’s chief economist, in a statement. “In some cases, firms are seeing a slowdown in demand, but for many the biggest challenge is finding enough workers to hire.”