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Dive brief:
- open construction jobs fell to 449,000 unfilled positions in December, a decrease of 21,000 workers, or 0.2%, compared to the previous month, according to data from the Bureau of Labor Statistics.
- The report measures jobs for which employers are actively seeking workers. At the end of last month, 5.3% of all construction jobs were unfilled. December ended with 39,000 fewer open positions compared to the same month in 2022.
- “The construction industry averaged 445,000 job offers per month in the fourth quarter of 2023,” Associated Builders and Contractors chief economist Anirban Basu wrote in a statement about the report. “This is the highest quarterly level on record and a strong indication that the labor shortages that have long plagued the construction industry remain firmly in place.”
Diving knowledge:
Last month, 150,000 construction workers quit and 169,000 were laid off, both slight declines from the previous month. Basu pointed to these numbers as a potential beacon of hope.
“While contractors are still laying off workers at a historically low rate, the rate at which construction workers are leaving has fallen below 2019 levels,” he wrote. “This is likely a reflection of the fall in demand for labor in industries that compete with construction for talent, such as trade, transport and utilities, which have seen a 25% decline in job offers over the past year.”
However, contractors, as always, face a Uphill battle in staff projects.
The need remains high
In 2024 it will be necessary to do so attract nearly half a million workers in addition to the normal pace of hiring, according to an ABC report released Wednesday. ABC uses a model that predicts the need for 3,550 new construction jobs for every billion dollars of new spending. This demand also adds up to above-average job openings.
The industry’s unemployment rate has remained historically low, indicating that the vast majority of construction workers are already employed, while job openings remain high and the contractor layoff rate has slowed down significantly.
“Over the past two years, cyclical influences have helped narrow the gap between supply and demand for construction workers,” Basu said. “While non-residential construction spending has continued to increase, the homebuilding segments have felt the impact of higher borrowing costs the most. With interest rates expected to decline in 2024 and 2025, the expectation is that the deficit of construction workers will remain high.”
And paying for labor will only get more expensive, a new study has found.
Construction wages rose 20% on average from 2021 to 2023, according to a report from data solutions provider Gordian. Those wages will likely continue to rise, Gordian said, because of the implementation of labor contracts project in booming infrastructures sector, and the rise of more megaprojects.
At the same time, baby boomers left the workforce in large swaths during the COVID-19 shutdown in early 2020, and many haven’t returned, and likely won’t, Gordian reported.
As a result, construction is facing an exodus of expertise.
“More than 1 in 5 construction workers are 55 or older, which means retirement will continue to take a toll on the industry’s workforce,” Basu said. “These are the most experienced workers and their departures are particularly worrying.”
