The U.S. construction industry needs to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet demand for labor, according to a model developed by Associated Builders and Contractors.
The construction industry averaged more than 390,000 job openings per month in 2022, the highest level on record, and the industry unemployment rate of 4.6% in 2022 was the second lowest on record. National payroll construction employment was 231,000 higher in December 2022 than in December 2021.
ABC predicts demand for labor to increase by 3,620 new jobs for every $1 billion in new construction spending. New funding for large projects such as chip manufacturing plants, clean energy facilities, and infrastructure upgrades will continue to put pressure on the job market.
ABC predicts that in 2024, the industry will need to hire 324,000 new workers on top of its normal pacing, and that assumes overall construction spending slows significantly. The number of workers with licensed skills hasn’t been enough to keep up with demand, and the ranks of licensed carpenters has actually declined in the last decade.
Here is full release from Associated Builders and Contractors:
The U.S. construction 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, according to a proprietary model developed by Associated Builders and Contractors.
“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’s proprietary 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.
The construction industry averaged more than 390,000 job openings per month in 2022, the highest level on record, and the industry unemployment rate of 4.6% in 2022 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. “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.”
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.
View ABC’s methodology in creating the workforce shortage model.
Related Stories
Healthcare Facilities | Oct 28, 2024
New surgical tower is largest addition to UNC Health campus in Chapel Hill
Construction on UNC Health’s North Carolina Surgical Hospital, the largest addition to the Chapel Hill campus since it was built in 1952, was recently completed. The seven-story, 375,000-sf structure houses 26 operating rooms, four of which are hybrid size to accommodate additional equipment and technology for newly developed procedures.
Contractors | Oct 25, 2024
Construction industry CEOs kick off effort to prevent suicide among workers
A new construction industry CEO Advisory Council dedicated to addressing the issue of suicide in the construction industry recently took shape. The council will guide an industry-wide effort to develop solutions targeting the high rate of suicide among construction workers.
Sports and Recreational Facilities | Oct 24, 2024
Stadium renovation plans unveiled for Boston’s National Women’s Soccer League
A city-owned 75-year-old stadium in Boston’s historic Franklin Park will be renovated for a new National Women’s Soccer League team. The park, designed by Fredrick Law Olmsted in the 1880s, is the home of White Stadium, which was built in 1949 and has since fallen into disrepair.
Laboratories | Oct 23, 2024
From sterile to stimulating: The rise of community-centric life sciences campuses
To distinguish their life sciences campuses, developers are partnering with architectural and design firms to reimagine life sciences facilities as vibrant, welcoming destinations. By emphasizing four key elements—wellness, collaboration, biophilic design, and community integration—they are setting their properties apart.
Adaptive Reuse | Oct 22, 2024
Adaptive reuse project transforms 1840s-era mill building into rental housing
A recently opened multifamily property in Lawrence, Mass., is an adaptive reuse of an 1840s-era mill building. Stone Mill Lofts is one of the first all-electric mixed-income multifamily properties in Massachusetts. The all-electric building meets ambitious modern energy codes and stringent National Park Service historic preservation guidelines.
MFPRO+ News | Oct 22, 2024
Project financing tempers robust demand for multifamily housing
AEC Giants with multifamily practices report that the sector has been struggling over the past year, despite the high demand for housing, especially affordable products.
Performing Arts Centers | Oct 21, 2024
The New Jersey Performing Arts Center breaks ground on $336 million redevelopment of its 12-acre campus
In Newark, N.J., the New Jersey Performing Arts Center (NJPAC) has broken grown on the three-year, $336 million redevelopment of its 12-acre campus. The project will provide downtown Newark 350 mixed-income residential units, along with shops, restaurants, outdoor gathering spaces, and an education and community center with professional rehearsal spaces.
Sports and Recreational Facilities | Oct 17, 2024
In the NIL era, colleges and universities are stepping up their sports facilities game
NIL policies have raised expectations among student-athletes about the quality of sports training and performing facilities, in ways that present new opportunities for AEC firms.
Codes and Standards | Oct 17, 2024
Austin, Texas, adopts AI-driven building permit software
After a successful pilot program, Austin has adopted AI-driven building permit software to speed up the building permitting process.
Resiliency | Oct 17, 2024
U.S. is reducing floodplain development in most areas
The perception that the U.S. has not been able to curb development in flood-prone areas is mostly inaccurate, according to new research from climate adaptation experts. A national survey of floodplain development between 2001 and 2019 found that fewer structures were built in floodplains than might be expected if cities were building at random.