The Construction Labor Shortage Is Over Half Million, Says New Study

Feb. 10, 2023
Approximately 3,620 jobs per billion dollars spent are needed

According to a new report put out by the Associated Builders and Contractors (ABC), the construction industry needs approximately 546,000 workers, along with normal hires to meet the demand for labor.

“The construction industry must recruit hundreds of thousands of qualified, skilled construction professionals each year to build the places where we live, work, play, worship, learn and heal,” said Michael Bellaman, ABC president and CEO. “As the demand for construction services remains high, filling these roles with skilled craft professionals is vital to America’s economy and infrastructure rebuilding initiatives.”

ABC used a proprietary model to gather this data. The model uses the historical relationship between inflation-adjusted construction spending growth (source: the U.S. Census Bureau's Construction Put In Place Survey), along with payroll construction employment (source: U.S. Bureau of Labor Statistics) which found that 3,620 new jobs per billion dollars spent are needed. 

The construction industry saw more than 390,000 job openings per month in 2022, the highest on record. the industry unemployment rate of 4.6% in 2022 was the second lowest on record.

“Despite sharp increases in interest rates over the past year, the shortage of construction workers will not disappear in the near future,” said ABC Chief Economist Anirban Basu. “First, while single-family home building activity has moderated, many contractors continue to experience substantial demand from a growing number of mega-projects associated with chip manufacturing plants, clean energy facilities and infrastructure. Second, too few younger workers are entering the skilled trades, meaning this is not only a construction labor shortage but also a skills shortage.

“With nearly 1 in 4 construction workers older than 55, retirements will continue to whittle away at the construction workforce,” said Basu. “Many of these older construction workers are also the most productive, refining their skills over time. The number of construction laborers, the most entry-level occupational title, has accounted for nearly 4 out of every 10 new construction workers since 2012. Meanwhile, the number of skilled workers has grown at a much slower pace or, in the case of certain occupations like carpenter, declined."

“To fill these important roles, ABC is working hard to recruit, educate and upskill the construction workforce through our national network of more than 800 apprenticeship, craft, safety and management education programs—including more than 300 government-registered apprenticeship programs across 20 different construction occupations—to build the people who build America,” said Bellaman. “ABC members invested $1.6 billion in 2021 to educate 1.3 million course attendees to build a construction workforce that is safe, skilled and productive.”


Source: ABC