Even before the Pandemic hit, construction labor has serious challenges finding enough skilled workers.
In the months ahead, challenges will mount as inflation, federal spending and an aging workforce will drive up costs, wages and the price of materials.
According to Associated Builders and Contractors Chief Economist, Anirban Basu, “As outlays from the infrastructure bill increase, construction spending will expand exacerbating the huge gap between supply and demand for labor”.
There are roughly 25% more unfilled construction positions than hires according to Nick Grandy a construction and real estate senior analyst at the consultancy RSM US. Grandy continued to say “I anticipate that we're going to see quite a bit of wage growth just because there is high demand for construction services and so few employees”. This will result in projects that were predicted to cost $500M ending up costing $600M because you're going to need to pay people more.
Data clearly shows serious labor shortages at a time when significant the federal infrastructure bill adds to the industry demands with $550B in approved spending calling for an estimated 3.2M new workers.
According to The Bureau of Labor Statistics, there are approximately 500,000 job openings from an April 2022 projection, which is unlikely to be met by a rapidly aging workforce.
Twenty percent of workers 55 and older, 61 being the average retirement age translates into a fifth of the industry is at risk of leaving within the next 5 years.
The question, according to Grandy is “whether strategies by union and non union training programs can be implemented fast enough to develop a workforce that will achieve the benefits infrastructure funding is intended to foster”.
According to David Meade, executive director of Building Skills NY, “they had a committed workforce pre pandemic but Covid disrupted many training programs and it will take time to ramp things up again to where they were”.
To be continued...
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