Construction labor shortages worsening

If you’re in the construction business, we have more not-so-great news to share about employment trends in the industry.

Employment in the sector slipped from July to August for the fourth time in five months, not because of any slowing in the economy but because contractors are having a hard time finding workers.

According to an analysis by the Associated General Contractors of America, two-thirds of contractors are having a hard time finding qualified craft workers.

“A variety of indicators suggest contractors would be adding to headcount if they could find qualified workers,” said Ken Simonson, the association’s chief economist.

He noted that compared to a year ago, employment has risen nearly twice as fast in construction as in the overall economy. Meanwhile, average hourly earnings are rising faster than in the private sector as a whole, suggesting contractors are paying more to attract workers.

Simonson noted that there were also fewer unemployed workers with construction experience than in any August since 2000.

Nationwide, construction employment totaled 6,640,000 in August. That was a dip of 6,000 from July but an increase of 199,000, or 3.1 percent, from a year ago.

Average hourly earnings, a measure of wages and salaries for all workers, increased 2.8 percent in construction over the past year to $28.22 in August, nearly 10 percent more than for all nonfarm jobs, the economist noted.

Association officials warned that workforce shortages run the risk of undermining the industry’s continued recovery and could stall broader economic growth.

As we’ve heard them do before, they noted that firms can only do so much to improve their efficiency before workforce shortages force them to reconsider bidding on projects or delaying schedules.

In July, the state announced a new construction career training program in conjunction with the Associated General Contractors of Colorado.

About the Author

Lon Matejczyk

Lon is the former publisher of the Colorado Springs Business Journal and Colorado Springs Military Newspaper Group.He has served in leadership roles at various newspapers in Iowa, Florida and Wisconsin. Lon received his Bachelor of Arts in Communications from the University of Wisconsin, Eau Claire and attended the Kellogg Graduate School of Management at Northwestern University. Earlier in his career, Lon spent several years as a sea captain and held a 100-ton Coast Guard license. Lon is a former rugby player, referee and administrator and now coaches under 13 year old kids. Lon has served on the boards of numerous community and business organizations including Colorado Springs Leadership Institute, Peak Venture Group, CS Quality of Life Indicators Business Index Committee, Junior Achievement and is a member of The Colorado Thirty Group.  Lon was given the “Making the Pikes Peak region a better place to live work and play” award by the CS Chamber of Commerce, was the VFW Post 1’s business citizen of the year.