More Construction Jobs Available, but Labor Shortage Worsens
U.S. job openings surged to record-high levels this year as companies have struggled to find people with the talents they need. The skills shortage is a broad issue that has become even more pressing for the construction sector, experts say, but the Trump administration has several proposals aimed at correcting the problem.
More than 90 percent of construction firms have reported that they are having a hard time hiring qualified workers, according to findings from The USG Corporation and U.S. Chamber of Commerce Commercial Construction Index (CCI).
Over the last four quarters, more than 90 percent of contractors have expressed concern over labor shortages, and 47 percent of respondents to the most recent quarterly CCI survey expect the issue to get worse in the next six months.
“Contractors’ pipelines for new business are consistently healthy. However, that optimism is challenged by a growing shortage of workers–a trend that’s persisted for more than a year,” said Jennifer Scanlon, president and chief executive officer of USG Corporation.
The survey notes that the outlook for hiring is very strong, with more than half of contractors reporting plans to employ more workers in the next six months.
An expected surge in infrastructure investment will spur new projects that will further increase labor demand. The Bureau of Labor Statistics reports that there are 232,000 job openings in the construction industry as of April.
In June 2017, President Donald Trump signed an executive order to reform education and expand access to apprenticeships and workforce-development programs, to help address the shortage of labor problem. The plan intends to ease the regulatory burden on apprenticeship programs and integrate classroom learning with on-the-job training.
To modernize the nation’s infrastructure, the U.S. needs more skilled construction workers. With the tightening labor market, there are not enough Americans available to take infrastructure jobs. And a lack of workers and narrow talent pipeline can slow Trump’s infrastructure program, warn experts.
Trump has proposed spending up to $1.5 trillion over the next 10 years for infrastructure, which includes reforms to improve access to high-quality education and workforce-development programs.
The proposal would expand Pell Grant eligibility to high-quality, short-term programs. Currently, the Pell Grant program awards money to eligible undergraduate students and cannot be used for short-term programs. The president’s proposal would also reform the Carl D. Perkins Career and Technical Education (CTE) program in order to provide skills-focused education to more students.
Trump argues that Congress needs to improve the CTE program so that federal funds can go to career education programs. The House unanimously passed an update to the Carl D. Perkins Career and Technical Education Act, but the Senate hasn’t taken any action yet.
The infrastructure plan could potentially revive the blue-collar economy by creating more jobs for welders, electricians, technicians, and truck drivers, according to a 2017 study by Georgetown University.
One-third of these jobs would require postsecondary degrees while the rest would only need no more than six months of training.
“This would require high schools, community colleges, and other postsecondary institutions to create programs to train workers for these jobs,” the report said.
Despite concerns over the labor shortage and skills gap, contractors overall maintained a strong economic outlook in the second quarter, with high business confidence and revenue expectations, according to the CCI survey.
Contractors currently hold an average of 9.3 months of backlog, which indicates a stable market with room for growth, the survey found. Almost all contractors report high or moderate confidence in the demand for commercial construction. And more than half of contractors expect to see revenue growth in the next year, an increase of 12 percent year-over-year.
In addition, there is a strong demand for sustainable buildings. Nearly half of respondents said sustainable projects give them a competitive advantage. Four out of five construction firms also cite that their customers request energy efficient materials for their projects, part of a rising demand for green materials.
Some contractors raised concerns about uncertainty in steel prices. Two-thirds of contractors identified steel fluctuations as their top material of concern and 86 percent believe the recently-imposed tariffs on steel and aluminum will have at least a moderate impact on their business.
The research was conducted by surveying more than 2,700 commercial and institutional contractors to track the change in business confidence and other key trends in the industry.