U.S. contractors pass on work due to labour shortages

Key Takeaways:

• Construction employment went up in 268 of 358 metro areas in the U.S.
• Officials say the gains would have been higher but demand for new project is outpacing labour availability. 
• Contractors reported this is causing them to pass on projects. 

The Whole Story:

A new report shows labour shortages are suppressing construction in the U.S.

Construction employment increased in 268 of 358 metro areas between November 2021 and November 2022, according to an analysis by the Associated General Contractors of America of new government employment data. Association officials said the job gains likely would have been higher but that many contractors report that demand for new projects is outpacing the availability of workers in many parts of the country.

“Contractors report they are passing on projects because they do not have enough people to do the work,” said Ken Simonson, the association’s chief economist. “Labor shortages are suppressing job gains in the construction industry in many parts of the country.”

Where the gains are happening

Houston-The Woodlands-Sugar Land, Texas added the most construction jobs (18,500 jobs or 9 per cent), followed by Dallas-Plano-Irving, Texas (13,500 jobs, 9 per cent); Seattle-Bellevue-Everett, Wash. (10,400 jobs, 10 per cent) and Phoenix-Mesa-Scottsdale, Ariz. (9,400 jobs, 7 per cent). 

The largest percentage gains were in Provo-Orem, Utah (23 percent, 6,400 jobs); Anchorage, Alaska (15 per cent, 1,400 jobs), Kankakee, Ill. (15 per cent, 200 jobs), Grants Pass, Ore. (15 percent, 200 jobs) and Providence-Warwick, R.I. (15 per cent, 4,000 jobs).

Construction jobs declined over the year in 45 metro areas and were unchanged in 45 areas. The largest loss occurred in Orlando-Kissimmee-Sanford, Fla. (-8,500 jobs, -10 per cent), followed by Richmond, Va. (-3,300 jobs, -8 percent); Camden, N.J. (-1,700 jobs, -7 per cent) and Austin-Round Rock, Texas (-1,400 jobs, -2 per cent). The largest percentage declines occurred in Orlando, Richmond and Camden.

Contractors passing on work

Association officials said that demand for construction remained relatively strong in many parts of the country, buoyed by robust public construction and infrastructure investments and strength in certain types of private sector development. They cautioned, however, that contractors in parts of the country report they are not bidding on projects because they do not have enough personnel to perform the work.

The association explained that is taking steps to address labor shortages, including running targeted digital advertising campaigns to recruit new workers. Meanwhile, more than 800 firms have signed up for the association’s Culture of Care program to make workplaces more welcoming and inclusive to retain a higher percentage, and more diverse, workforce.

Immigration reform needed

Association officials urged Congress to pass immigration reform to allow more construction workers to enter the country. They also pushed for greater investments in construction-focused training and education programs.

“We are working hard to recruit and retain a new generation of construction professionals,” said Stephen E. Sandherr, the association’s chief executive officer. “Public officials can help put more people into high-paying construction careers by making common sense immigration reforms and investing in domestic construction prep programs as well.”