Construction firms are turning down work due to the labor shortage, but most are willing to pay more to find workers

|  August 28, 2014 |

AGC SmartBrief skilled labor shortage survey 2014A majority of construction companies across the U.S. are facing a shortage in skilled labor and a large number of them have been forced to turn down work in the last year because they didn’t have the workers needed for the job, according to a recent survey conducted by the Associated General Contractors of America and SmartBrief.

However, these companies overwhelmingly say they are willing to pay more to hire the right workers.

The AGC and SmartBrief conducted the survey in early June with 509 respondents representing several sectors of the construction industry. Of the respondents, 48 percent were general contractors and 28 percent were subcontractors.

The survey found that 63 percent of respondents had faced a labor shortage in the last year.

The South and Midwest appear to be having the hardest time with the shortage with 73 percent and 71 percent of respondents, respectively, answering “yes” to that question. In the West, firms were nearly split with 53 percent answering “yes” and 47 percent answering “no”. The Northeast was the lone region where the majority of respondents said they weren’t facing a shortage at all with 55 percent answering “no” and 45 percent answering “yes.”

More troubling is the fact that 30 percent of respondents to the June survey say they have actually turned down work because of the labor shortage.

In the wake of the recession, 2 million workers left the construction industry, either retiring or finding more stable work in another industry. According to the latest data from the Commerce Department, the industry is on a seven-month streak of adding jobs and now employs 6.041 million Americans—an increase of 609,000 jobs since the low point for construction employment in January 2011. And after reaching a high of 27.1 percent in February 2010, the industry’s unemployment rate has fallen to 7.5 percent.

Despite the gains, contractors have said they expect the labor shortage to intensify and competition between firms for skilled workers to grow.

In fact, 67 percent of respondents to the recent AGC/SmartBrief survey said they’re paying more for skilled labor this year than they did last year. Thirty-one percent said they’re paying the same and only 2 percent said they’re paying less. And when it comes to paying even more for skilled workers, 80 percent of respondents said they would do just that.

According to the survey, project managers/supervisors, superintendents and carpenters were the top three hardest positions to fill. Equipment operators, estimators and general laborers tied for the next spot, followed by welders. You can see more in the graphic above.

The survey also broached the topic of community college apprenticeships and whether they could be a solution to the labor shortage. On this, responses were mixed, with 34 percent saying they were willing to work with community colleges on apprenticeships and 33 percent saying they have no plans to do so. Additionally, 26 percent said they’re currently working with such a program and 7 percent said they’ve tried it unsuccessfully.

You can see the full survey here.

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