According to a new report by the USG Corporation and the U.S. Chamber of Commerce, most commercial contractors believe business will improve in the next year, but a skilled labor shortage may impact growth potential if current hiring trends continue.
“The commercial construction industry is essential to the U.S. economy – when America is building or re-building, America is growing,” said Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce. “It is great news that the majority of these companies are ready to hire. As worker shortages persist across industries, sectors like commercial construction will have to find solutions through new innovations, technology, and training to continue growing and moving the broader U.S. economy forward.”
Recent Hiring Trends Point to Industry Growth
Nearly every contractor surveyed reported high or moderate confidence in the demand for commercial construction. Approximately one-third of contractors believe the market will continue to provide strong business opportunities for the next 24 months.
“Commercial contractors remain optimistic about the industry outlook, although labor productivity and costs are hindering jobsite efficiency,” said Jennifer Scanlon, president and CEO of USG Corporation. “There is an urgent need for innovations in building materials and workforce development programs.”
Employment Levels Rise
Construction employment increased by 30,000 jobs in December 2017 to its highest level in nearly 10 years, according to an analysis of hiring trends by the Associated General Contractors of America.
“Employment and pay in construction have risen more rapidly over the past year than in the economy overall, as the supply of unemployed, experienced workers continues to shrink,” said Ken Simonson, the Association of General Contractors of America’s chief economist. “Construction pay is now almost 10 percent higher than the private-sector average. Nevertheless, contractors report increasing difficulty filling many types of hourly craft and salaried openings, given the low rate of unemployment throughout the economy, including construction.”
Labor Shortage may Continue in 2018
With stable or increased revenue projections in the commercial construction industry, 57 percent of contractors expect to hire new employees in the next six months, according to the U.S. Chamber of Commerce report on hiring trends. This increase in open construction jobs is good news, except for the fact that the industry is already suffering from a labor shortage.
- In the third quarter of 2017, 60 percent of contractors reported difficulty finding skilled workers.
- Nearly half of contractors predict that it will continue to be difficult to find skilled workers in the next six months.
- 92 percent report that they are at least moderately concerned about the skill level of available workers.
According to the Association of General Contractors of America, construction employment is now at about 7 million individuals, a gain of 210,000 in the last year. This increase is more than double the total rise in nonfarm payroll employment in 2017.
“Most construction firms plan to add workers during 2018 as demand for all types of construction continues to expand,” said Stephen E. Sandherr, the Association of General Contractors of America’s chief executive officer. “The biggest challenge they face will be finding qualified workers to hire as the labor market continues to tighten.”