Over 90% of construction firms struggling to hire workers

The construction industry has a shortage of workers (Photo: AdobeStock)

Workforce shortages are affecting nearly all construction firms in the US, undermining the industry’s ability to complete projects on time and on schedule and threatening the success of new investments, according to the results of a survey conducted by the Associated General Contractors of America (AGC) and Autodesk.

The survey found that 93% of construction firms report they have open positions they are trying to fill. Among those firms, 91% are having trouble filling at least some of those positions – particularly among the craft workforce that performs the bulk of onsite construction work.

The results underscore how public officials have a vested interest in investing in new construction-focused workforce development programs, association officials said.

“Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes and all labor arrangements,” said Ken Simonson, AGC chief economist. “These workforce shortages are compounding the challenges firms are having with supply chain disruptions that are inflating the cost of construction materials and making delivery schedules and product availability uncertain.”

All types of firms are experiencing similar challenges. Nearly identical results were reported by contractors that use both union and non-union workers, by firms with US$50 million or less in annual revenue and ones with more than $500 million in revenue, and by contractors doing building construction, highway and transportation projects, federal and heavy work, or utility infrastructure.

One of the main reasons labor shortages are so severe is that most job candidates are not qualified to work in the industry. The most common explanation for difficulty in hiring, cited by 77% of firms, is that available candidates lack the skills needed to work in construction or cannot pass a drug test.

Most firms have raised pay rates to try and attract workers. In addition, 45% are providing incentives and bonuses and a quarter of firms have also improved their benefits packages

Labour shortages are exacerbating the impacts of the widespread supply chain disruptions that have made it difficult for firms to get materials delivered on time and that are driving up the cost of those materials. Over 80% of firms report projects they work on have been delayed because of supply chain challenges and 66% have projects that have been delayed because of labor shortages.

Supply chain problems and labor shortages are making construction more expensive. Approximately 86% of firms have raised base pay rates for their workers while 70% have passed along rising materials costs to project owners during the past year.

Cost and supply chain challenges have prompted some owners to cancel or delay projects. Over half of respondents report owners canceled, postponed or scaled back projects due to increasing costs, while one-third of firms report projects were impacted due to lengthening or uncertain completion times.