Labor Shortages Continue to Disrupt Construction Industry

collaboration
Published On
Sep 9, 2021

According to a report from Associated General Contractors of America (AGC), Arlington, Va., the construction industry lost a total of 3,000 jobs between July and August 2021, as continuing declines in nonresidential segments of construction offset a pickup among residential building and remodeling firms.

AGC reported that construction employment in August totaled 7,416,000 jobs, a decline of 3,000 from July. Employment among nonresidential firms (consisting of heavy and civil engineering construction firms as well as nonresidential building and specialty trade contractors) shrank for the fifth month in a row, by 20,300. On the other hand, homebuilders and residential specialty trade contractors added 17,400 jobs, which represented the fourth-straight monthly gain.

According to AGC, contractors, especially those in the nonresidential segments, are facing multiple challenges—the most serious among them being lack of available labor and supply chain delays.

For example, AGC’s survey showed that many contractors are eager to hire people but are encountering a lack of qualified applicants. In fact, 72% of survey respondents, comprising more than 9,100 firms, reported that available job candidates were not qualified.

In more detail, 90% of responding firms had openings for hourly craft workers, while 62% had openings for salaried employees.

“Overwhelming percentages of firms with openings reported having a hard time filling positions, including 89% of the companies seeking craft workers and 86% of those looking for salaried employees,” according to the AGC.

Furthermore, supply-chain delays are tending to hold back nonresidential employment gains. AGC noted that three-quarters of respondents reported that their projects were delayed due to longer lead times or material shortages, while 57% reported delivery delays.

“Today’s figures show that nonresidential building and infrastructure contractors are having a hard time recovering from the impact of the pandemic on demand for structures,” said Ken Simonson, AGC’s chief economist. “At the same time, our survey finds many contractors have job openings but are experiencing a lack of qualified applicants, shortages of materials and long delivery delays.”

“Contractors are eager to hire more workers, but they need Washington officials to make sure there is enough funding for vitally needed infrastructure to justify hiring,” said Stephen E. Sandherr, AGC’s CEO. “In addition, more federal money should be going into preparing workers to execute these projects.

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