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
Industry Research | Aug 19, 2021
BD+C Market Intelligence Reports
Exclusive research, data, and trends reports from the editors of Building Design+Construction.
Resiliency | Aug 19, 2021
White paper outlines cost-effective flood protection approaches for building owners
A new white paper from Walter P Moore offers an in-depth review of the flood protection process and proven approaches.
Multifamily Housing | Jul 7, 2021
Make sure to get your multifamily amenities mix right
One of the hardest decisions multifamily developers and their design teams have to make is what mix of amenities they’re going to put into each project. A lot of squiggly factors go into that decision: the type of community, the geographic market, local recreation preferences, climate/weather conditions, physical parameters, and of course the budget. The permutations are mind-boggling.
Digital Twin | May 24, 2021
Digital twin’s value propositions for the built environment, explained
Ernst & Young’s white paper makes its cases for the technology’s myriad benefits.
Industry Research | May 20, 2021
Latest ULI report forecasts robust real estate rebound
It’s going to take some time, though, for the office sector to recover
Industry Research | Apr 9, 2021
BD+C exclusive research: What building owners want from AEC firms
BD+C’s first-ever owners’ survey finds them focused on improving buildings’ performance for higher investment returns.
Market Data | Feb 24, 2021
2021 won’t be a growth year for construction spending, says latest JLL forecast
Predicts second-half improvement toward normalization next year.
Healthcare Facilities | Feb 18, 2021
The Weekly show, Feb 18, 2021: What patients want from healthcare facilities, and Post-COVID retail trends
This week on The Weekly show, BD+C editors speak with AEC industry leaders from JLL and Landini Associates about what patients want from healthcare facilities, based on JLL's recent survey of 4,015 patients, and making online sales work for a retail sector recovery.
Market Data | Jan 19, 2021
2021 construction forecast: Nonresidential building spending will drop 5.7%, bounce back in 2022
Healthcare and public safety are the only nonresidential construction sectors that will see growth in spending in 2021, according to AIA's 2021 Consensus Construction Forecast.