It’s not getting any easier for commercial construction companies to find the skilled workers they need to staff their job sites. This shortage of skilled labor ranks as one of the bigger challenges that commercial construction companies face.
That’s the big takeaway from a recent study looking at the hurdles that commercial constructions companies must overcome in today’s competitive construction industry.
A recent analysis by financial services and accounting firm Marcum LLP, based on data from the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS), indicates that despite some economic improvements in 2023, the construction industry remains hampered by a severe shortage of skilled labor.
The annual analysis, conducted by Marcum’s National Construction Services Group, reveals that although the economy showed signs of strength with robust hiring in the construction sector throughout 2023, the industry still grapples with a significant deficit in skilled workers.
Anirban Basu, Marcum’s chief construction economist and the report’s author, noted that despite steady job growth over the past 10 months, the industry remains about 500,000 jobs short of pre-pandemic levels.
According to Basu, the pace of hiring in the construction industry would have been even stronger if not for the persistent shortage of skilled labor that companies face. He highlighted that throughout 2023, an average of 4.6% of construction positions remained unfilled, marking the second-highest level on record, surpassed only by the previous year’s 4.9% average.
While other industries have seen improvements in labor supply imbalances, the construction sector continues to face challenges. This has led to increased labor costs. Basu said that since the beginning of 2022, average hourly earnings for construction workers have outpaced wage growth across all industries, a trend expected to persist into 2024 due to sustained demand for construction services. But even with these higher wages, construction companies have struggled to fill their empty positions.
Marcum’s report wasn’t all gloomy, though. Joseph Natarelli, Marcum’s national construction leader, expressed cautious optimism about the future of the construction industry despite these challenges.
Companies that strive for creative solutions to meet their staffing needs are the same companies that will thrive throughout 2024 and beyond, he said.
“The demographic trends at the heart of labor shortages over the years are likely to continue,” Natarelli said. “With Baby Boomers edging toward retirement and immigration offering limited relief, our industry must navigate these headwinds with innovative hiring strategies and a firm grasp on market forecasts.”
