With the U.S. construction labor market as tight as ever, the Associated General Contractors of America (AGC) is calling on the Trump Administration and Congress to step up efforts to increase the supply of qualified workers.
The AGC and Sage Construction and Real Estate surveyed 1,000 contractors and the results are detailed in their report, “Strong Demand for Work Amid Stronger Demand for Workers: The 2020 Construction Hiring and Business Outlook Report.” The report found that the labor shortages lead to staffing challenges, more expensive projects and ones that take longer to complete.
Of those surveyed, 75% expect to add workers in 2020, but even more respondents found it difficult to fill positions in 2019. A majority anticipate it will be as hard or harder to do so in 2020. Of the respondents, 81% said it is difficult to fill open positions. More than half of respondents see inexperienced workers and workforce shortages as a major challenge to the safety and health of their workforce.
To recruit more workers, over half raised base pay rates last year more than in 2018, while many also increased or introduced incentives, bonuses and benefit contributions. More than two-fifths of contractors revamped initiatives to recruit labor. One in three firms increased money allocated to technical education and nearly as many restructured or changed programming for current craft professional recruits.
Still, the shortage is affecting costs.
“In light of those staffing challenges, costs have been higher than anticipated for 44% of respondents and projects took longer than anticipated for 40% of them,” said Ken Simonson, the association’s chief economist. “As a result, 41% of respondents have put higher prices into their bids or contracts and 23% have put in longer completion times.”
Respondents report having higher challenges in keeping project costs low and completion times short. Project costs were higher than what half of the respondents anticipated, and nearly the same percentage of firms are including higher prices in their bids.
To ensure contractors have access to an adequate supply of qualified workers, which will then help to relive the pressure on construction times and costs, the AGC is urging the Trump Administration and Congress to double funding for career and technical education over the next five years and to pass the JOBS Act for expanded opportunities for students seeking alternatives to college. They are also asking for Congress to allow more people to legally enter the United States with a goal of helping with the labor shortage and adding a temporary work visa centered on construction.