Construction workforce short by more than half a million, says ABC

The construction industry will need to attract an estimated 546,000 additional workers on top of the normal pace of hiring in 2023 to meet the demand for labor, according to a proprietary model developed by the Washington-based Associated Builders and Contractors (ABC).

“The construction industry must recruit hundreds of thousands of qualified, skilled construction professionals each year to build the places where we live, work, play, worship, learn and heal,” ABC President and CEO Michael Bellaman says. “As the demand for construction services remains high, filling these roles with skilled craft professionals is vital to America’s economy and infrastructure rebuilding initiatives.”

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ABC’s proprietary model uses the historical relationship between inflation-adjusted construction spending growth, sourced from the U.S. Census Bureau’s Construction Put in Place survey, as well as payroll construction employment data, sourced from the U.S. Bureau of Labor Statistics, to convert anticipated increases in construction outlays into demand for construction labor at a rate of approximately 3,620 new jobs per $1 billion of additional construction spending. This increased demand is added to the current level of above average job openings. Projected industry retirements, shifts to other industries and other forms of anticipated separation are also embodied within computations.

The construction industry averaged more than 390,000 job openings per month in 2022, the highest level on record, and the industry unemployment rate of 4.6 percent in 2022 was the second lowest on record, higher only than the 4.5-percent unemployment rate observed in 2019. National payroll construction employment was 231,000 higher in December 2022 than in December 2021.

“Despite sharp increases in interest rates over the past year, the shortage of construction workers will not disappear in the near future,” ABC Chief Economist Anirban Basu says. “First, while single-family home building activity has moderated, many contractors continue to experience substantial demand from a growing number of mega-projects associated with chip manufacturing plants, clean energy facilities and infrastructure. Second, too few younger workers are entering the skilled trades, meaning this is not only a construction labor shortage but also a skills shortage.

Retirement also will continue to add to the problem because one in four construction workers is older than 55, he adds.

“Many of these older construction workers are also the most productive, refining their skills over time,” Basu says. “The number of construction laborers, the most entry-level occupational title, has accounted for nearly four out of every 10 new construction workers since 2012. Meanwhile, the number of skilled workers has grown at a much slower pace or, in the case of certain occupations like carpenter, declined.

ABC is working hard to educate, recruit and upskill current construction workers through its network of more than 800 programs, says Bellaman.

“ABC members invested $1.6 billion in 2021 to educate 1.3 million course attendees to build a construction workforce that is safe, skilled and productive,” he says.

In 2024, the industry will need to bring in more than 342,000 new workers on top of normal hiring to meet industry demand, and that’s assuming that construction spending growth slows significantly next year.