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Labor Shortages Squeeze Construction, August Jobs Stagnant09-18-13 | News

Labor Shortages Squeeze Construction, August Jobs Stagnant

Few new jobs were available for construction workers in August, despite a 2.3 percent year-over-year decline in the unemployment rate. The industry's workforce has not grown significantly since March. A recent survey of construction firms shows that labor shortages, especially among skilled tradesmen, are an ongoing obstacle to industry growth that will likely worsen before it improves.

Construction employment idled in August, as the industry unemployment rate fell and a majority of companies reported trouble filling positions, according to an industry survey and employment data analysis by the Associated General Contractors of America (AGC).

The unemployment rate for workers last employed in construction actively looking for jobs declined from 11.3 percent in August 2012 to 9.1 percent last month – the lowest August rate since 2008.

"Construction hiring and spending have been stuck in neutral through most of 2013," said Ken Simonson, the AGC's chief economist. "Yet the unemployment rate for former construction workers hit the lowest August level in five years, suggesting that experienced workers are leaving the industry rather than returning to it. As a result, firms are already having trouble finding workers."

Construction employment totaled 5,798,000 in August, matching the July total, which was revised up by 5,000 from the initial estimate released last month. The August jobs total is 3.0 percent higher than in August 2012, but has remained nearly flat since March 2013.

"Over the past three years, the number of unemployed, experienced construction workers has dropped by half," Simonson said. "Unfortunately, the construction industry has been able to hire only about a third of those workers, while the rest have left construction for other industries, schooling, retirement or have dropped out of the labor force.

"The recent leveling-off of construction hiring means the industry risks losing more of its experienced workers, setting up a potentially grave shortfall when demand for construction resumes."

That shortfall may be closer than some realize. An industry-wide AGC survey found that 74 percent of construction firms across the country are having trouble finding qualified craft workers to fill key spots.

The difficulties most often reported by responding firms are in filling such onsite construction jobs as carpenters, equipment operators and laborers. Fifty-three percent are having a hard time filling professional positions – especially project supervisors, estimators and engineers.

"Many construction firms are already having a hard time finding qualified workers and expect construction labor shortages will only get worse," said Stephen Sandherr, the AGC's chief executive officer. "We need to take short- and long-term steps to make sure there are enough workers to meet future demand and avoid the costly construction delays that would come with labor shortages."

Eighty-six percent of respondents said they expect it will remain difficult or get harder to find qualified craft workers, while 72 percent say the market for professional positions will remain hard or get worse. Seventy-four percent of respondents report there are not enough qualified craft workers available to meet future demand, while 49 percent said there weren't enough construction professionals available, Sandherr said.