Economy Watch: Construction Industry Tries to Cope With Worker Shortage

The construction boom in the U.S.—particularly in the multifamily, office and lodging sectors—is putting the squeeze on the industry to find qualified workers.

The construction boom in many U.S. markets, especially in the multifamily, office and lodging sectors—which have seen the largest increases in construction spending in recent years—is putting the squeeze on the construction industry. According to a recent survey by the Associated General Contractors of America, two-thirds of construction firms report having a hard time filling hourly craft positions that represent the bulk of the construction workforce.

Of the 1,459 survey respondents, fully 69 percent said they’re experiencing difficulty filling these positions. Craft worker shortages are the most severe in the Midwest, where 77 percent of contractors say they’re having a hard time. In the South, 74 percent are have a tough time. The labor shortages come as demand for construction continues to grow, prompting many firms to change the way they pay and operate to cope.

Namely, nearly half of construction firms have increased base pay rates for craft workers. Twenty-two percent have improved employee benefits, and 20 percent report they’re providing incentives and bonuses to attract workers. Forty-eight percent of firms also report they are doing more in-house training to cope with workforce shortages.

Not only that, 47 percent of respondents report increasing overtime hours, while 39 percent are increasing their use of subcontractors, according to the report. Also, 37 percent report getting involved with career-building programs in local schools. Twenty-one percent said they’re increasing their use of labor-saving equipment; 13 percent are using offsite prefabrication; and 7 percent are using virtual construction methods, such as Building Information Modeling.