Labor Shortage, but More Projects Expected in 2020?

Construction employment saw another increase in total jobs in December of approximately 20,000 and a total of over 150,000 for 2019, representing a 2% increase from 2018 according to a study completed by the Associated General Contractors of America.  Another interesting stat from the survey includes three out of four contractors expect to continue to add workers throughout 2020 even though there was a shortage in 2019 and expect it to be even harder to find qualified employees in 2020.  The unemployment rate for experienced construction workers is the lowest ever in the 20-year history of the survey.

Over the course of 2019, construction employees’ average hourly earnings increased by approximately 3%, driven by companies increasing the base pay rates for hourly craft workers due to difficulties in attracting skilled laborers.  The Associated General Contractors of America have taken a few different steps to combat these labor shortages, with the increase in pay, as well as becoming more efficient.   Contractors believe that there will be an increase in overall projects in 2020 and that the key will be to bid the projects correctly.  Companies have started to increase their rates in bids as well as put in a longer completion time, which has helped them to recoup some of the additional costs associated with the labor shortage.

The main focus for contractors as we head into 2020 is on the recruiting front, as they hire new workers and attempt to get federal and state officials to increase funding for technical education, which could lead to significantly more programs geared towards recruiting and equipping students who might be considering the construction industry for their future.  Will that happen?  All we can do is wait and see, but the overall outlook for 2020 is positive, with more growth anticipated.

If you have any questions don’t hesitate to contact us or check out the Schneider Downs Construction Industry Group.