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Construction Workforce Shortage Tops Half a Million in 2023

Construction Workforce Shortage Tops Half a Million in 2023

Feb. 20, 2023
In 2022, there were more than 390,000 job openings per month, the highest level on record.

Like every other industry, worker shortages are an issue in the construction industry.

A recent model developed by Associated Builders and Contractors found that the industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 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, in a statement. “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’s model uses the historical relationship between inflation-adjusted construction spending growth, sourced from the U.S. Census Bureau’s Construction Put in Place survey, as well as payroll construction employment, sourced from the U.S. Bureau of Labor Statistics, to convert anticipated increases in construction outlays into demand for construction labor at a rate of approximately 3,620 new jobs per billion dollars of additional construction spending.

This increased demand is added to the current level of above-average job openings. Projected industry retirements, shifts to other industries and other forms of anticipated separation are also embodied within computations.

Retirement Continues

Job openings continue to raise as the industry averaged more than 390,000 job openings per month in 2022, the highest level on record.

Added to that is the industry unemployment rate of 4.6% in 2022, which was the second lowest on record, higher than only the 4.5% unemployment rate observed in 2019. National payroll construction employment was 231,000 higher in December 2022 than in December 2021.

“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, in a statement. “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.

Filling the Gap

“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 apprenticeships, 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.”

In 2024, the industry will need to bring in more than 342,000 new workers on top of normal hiring to meet industry demand, and that’s presuming that construction spending growth slows significantly next year.

About the Author

EHS Today Staff

EHS Today's editorial staff includes:

Dave Blanchard, Editor-in-Chief: During his career Dave has led the editorial management of many of Endeavor Business Media's best-known brands, including IndustryWeekEHS Today, Material Handling & LogisticsLogistics Today, Supply Chain Technology News, and Business Finance. In addition, he serves as senior content director of the annual Safety Leadership Conference. With over 30 years of B2B media experience, Dave literally wrote the book on supply chain management, Supply Chain Management Best Practices (John Wiley & Sons, 2021), which has been translated into several languages and is currently in its third edition. He is a frequent speaker and moderator at major trade shows and conferences, and has won numerous awards for writing and editing. He is a voting member of the jury of the Logistics Hall of Fame, and is a graduate of Northern Illinois University.

Adrienne Selko, Senior Editor: In addition to her roles with EHS Today and the Safety Leadership Conference, Adrienne is also a senior editor at IndustryWeek and has written about many topics, with her current focus on workforce development strategies. She is also a senior editor at Material Handling & Logistics. Previously she was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck?, which made the Cleveland Plain Dealer's best sellers list.

Nicole Stempak, Managing Editor:  Nicole Stempak is managing editor of EHS Today and conference content manager of the Safety Leadership Conference.

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