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Construction Worker Shortage at ‘Crisis Level’

Construction Worker Shortage at ‘Crisis Level’

Nov. 9, 2021
The construction industry will need an additional 2.2 million new hires over the next three years to meet the demand for housing.

The U.S. is going to need a lot of construction workers to keep up the housing industry – 740,000 workers per year over the next three years. That's according to a new report, released on Nov. 5, by the Home Builders Institute (HBI). 

The HBI’s Fall 2021 Construction Labor Market Report’s estimation is based on a new analysis of Bureau of Labor Statistics data by the National Association of Home Builders (NAHB), which is determined by approximating the required net growth in employment due to construction expansion plus the workers required to replace individuals who leave the sector permanently.

The report notes that more than 12 million new households have been formed since the beginning of 2012, while approximately only 10 million new homes for ownership and rent were built during the same time.

Translating that demand into the demand for workers, the report explains that every month the industry will have to hire 61,000 people. This figure takes into account workers who are either retiring or leaving the sector for other areas.

“From 2022 through 2024, this total represents a need for an additional 2.2 million new hires for construction. That’s a staggering number,” said HBI CEO Ed Brady, in a statement.

The report, based on research of NAHB’s Economics Group, provides an overview of the state of the nation’s construction labor market. Other key findings include:

  • The number of open construction sector jobs currently averages between 300,000 to 400,000 each month.
  • Half of payroll workers in construction earn more than $50,460 annually and the top 25% make at least $71,000. In comparison, the U.S. median wage is $49,150 while the top 25% make at least $67,410.
  • Construction employment currently totals 7.42 million. Residential construction represents 3.1 million of this total amount.
  • Self-employment in construction is currently 22% of the labor force, down from 26% in 2010.
  • The share of immigrants in construction trades is 30%.
  • Women make up a slightly growing share of the construction employment, up to 10.9% in 2020 from 10.3% in 2019.
  • The median age of construction workers is 41. However, due to aging trends, the share of construction workers aged 25 to 54 decreased from 72.2% in 2015 to 69.0% in 2019.

“The construction worker shortage has reached crisis level,” said Brady. “The situation will become more challenging in the coming year when other industries rebound and offer competitive wages and benefits to prospective employees.”

To help solve this issues Brady calls for the industry to build the next generation of skilled tradespeople in construction. He says a priority for the industry is to work with “work with parents, educators and students, as early as the middle school years, to demonstrate that young people can have the promise of great jobs and careers in the trades.”

The chief executive outlined six fundamental steps that home builders can take to increase the number of skilled construction trade workers in the U.S.:

  1. Reach out to secondary school students, and those who influence their decisions, to change their perception of careers in construction.
  2. Increase worker pay while balancing the need to keep homeownership affordable.
  3. Attract more women into careers in construction.
  4. Train and place more minority and lower-income youth and adults for job opportunities.
  5. Increase trade skills education for veterans and transitioning military.
  6. Work for bipartisan approaches to sensible immigration policies.

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