worker shortage

AGC Survey ID’s Skills Deficits, Failed Drug Tests as Factors in Applicant Shortages

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

Few candidates have the basic skills needed to work in high-paying construction careers, forcing short-staffed contractors to find new ways to keep pace with demand, according to the results of a workforce survey conducted by the Associated General Contractors of America and Autodesk.

“Eight-five percent of companies surveyed – firms with under $50 million to more than $500 million in annual revenues – reported that they’ve got open positions they’re trying to fill,” said AGC Chief Economist Ken Simonson, “and 88 percent of these employers are having trouble filling at least some of these positions, particularly those associated with craft trades.”

The latest workforce survey, completed by 1,401 respondents, also captured a startling metric regarding illicit drug use among construction job applicants, according to Simonson.

“Fully one-third of candidates applying for construction industry positions cannot pass a drug test,” he said. “And 68 percent of firms surveyed said applicants lack basic, necessary reading and mathematics knowledge.”

In line with these sentiments, 41 percent of construction companies surveyed told the AGC they’re boosting spending on training and development.

Allison Scott, director of customer experience and industry advocacy at Autodesk, says the construction industry’s increasing adoption of artificial intelligence and robotics is manifesting greater career opportunities for new hires and existing employees.

“For potential hires, a career opportunity in construction should mean an opportunity to work with advanced technology and perform safe, meaningful work,” Scott said. “As firms adopt more digital technologies and create stronger classroom and training pathways, we’ll begin to see a new generation enter the industry equipped with the tools and skills needed to tackle construction’s largest challenges.”

For detailed survey materials including national, regional and state fact sheets, survey analysis and more, click here.

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56% of Contractors Nationwide Say Worker Shortage Trumps Supply Chain Woes

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

At Construction Executive’s Dec. 14 economic update and 2023 forecasting session, Associated Builders and Contractors Chief Economist Anirban Basu said the U.S. economy’s “overheated” condition is likely to continue manifesting a prolonged and profound worker shortage in construction, and is also making it tough for estimators to accurately price future builds.

By “overheated,” Basu is referring to a fast-growing economy that is reaching the limits of its capacity to meet existing demand.

The Federal Reserve’s action and inaction, unchecked inflation during 2021 and 2022 and relative scarcity/supply chain delays of construction materials are additional factors contributing to contractors’ challenges during 2023 and beyond, he said.

During the national ABC forecasting webinar earlier this month, contractors were polled as to the greatest challenge impacting their firms at the close of 2022. A total of 56 percent identified skills/worker shortage as the number-one impediment, followed by 28 percent who ranked supply chain and/or materials issues as their biggest hurdle.

“Oil and natural gas prices have soared during 2022, inflation has increased substantially and supply chains remain unpredictable,” said Basu. “And yet, contractors’ leading challenge – even more than it was a year ago – is finding enough workers to get the job done. I find that remarkable. As an economist, I would’ve expected to see some impact on the demand for construction services, but it’s still not that way. It still speaks to a market that is more characterized by demand than by capacity to meet that demand.”

Year 2022 has also been defined by a series of profound interest rate increases, Basu said, adding that the Federal Reserve did not raise rates at all during 2021, leaving inflation to broaden as a result of numerous economic events and pressures. “We are seeing the worst of inflation behind us,” he said, “but inflation will continue to remain problematic in 2023.”

Russian’s invasion of Ukraine in February 2022, he noted, sparked the global market’s response of soaring prices in energy and other construction inputs. While the U.S. inflation rate is more tempered now at year’s end than it was in June 2022, Basu said inflationary pressures have been transmitted from one period to the next, creating somewhat of a self-fulfilling prophesy for the construction industry as contractors and others build inflationary expectations of what transpired in 2022 into their project cost estimates for 2023 and beyond.

“Public-sector construction has a good outlook for the next five years at least,” he said. “But privately financed construction will likely continue to face capacity issues in terms of human capital.”

A leading upstream indicator going forward into 2023 and 2024, according to Basu, will be the volume of work that flows to design firms next year. “Contractors are saying they still have healthy backlogs of work through 2023,” said Basu. “But if we see upstream design firm activity dry up, then we’ll anticipate that 2024 isn’t going to be as strong for contractors.”

Demand throughout 2023 for construction of data centers, fulfillment centers and healthcare builds is expected to remain robust, according to Basu.

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Industry Still Struggling to Find People, AGC Survey Says

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By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE

The Associated General Contractors of America’s latest workforce survey reveals that 77 percent of construction industry job candidates either lack the necessary skills or cannot pass a drug test.

A total of 1,266 individuals coast to coast representing all sizes of companies and all sectors weighed in on the survey during July and August.

According to AGC Chief Economist Ken Simonson, 93 percent of construction firms surveyed reported they have open positions they’re seeking to fill. Among those firms, 91 percent are having trouble filling at least some of those positions.

“Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes and all labor arrangements,” Simonson said. “These workforce shortages are compounding the challenges firms are having with supply chain disruptions that are inflating the cost of construction materials and making delivery schedules and product availability uncertain.”

More than half (55 percent) of Missouri respondents indicated that their construction firm’s headcount has increased over the past year. Estimating personnel are the most needed salaried positions, according to Missouri firms, followed by project managers/supervisors and engineers.

Regarding the direst needs for craft workers, 91 percent of Missouri construction respondents identified concrete workers and carpenters as the most sought-after tradespeople, followed closely by cement masons and laborers.

Missouri’s surveyed response to the problem of filling available construction industry positions of all types tracked closely with the national statistic. Seventy-six percent of Show-Me State respondents identified job candidates’ lack of transferable job skills and inability to pass a drug test as the greatest barriers to hiring.

A total of 89 percent of those responding from Missouri companies of all sizes said their firm has increased base pay rates and/or benefits in the past 12 months. Eighty-two percent of those surveyed who work in Missouri reported schedule delays due to longer lead times, material shortages or both. More than half (54 percent) said upcoming projects have been canceled, postponed or scaled back due to increasing costs.

For more detail on the AGC’s latest construction industry workforce survey results, see https://www.agc.org/news/2022/08/31/construction-workforce-shortages-risk-undermining-infrastructure-projects-most-contractors-struggle.

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