ConDig (30-Aug-18). Well over two thirds of contractors are struggling to secure craft workers as a deepening skills shortage raises costs for companies across the construction industry, according to a latest survey by the Associated General Contractors of America (AGC).
Of the more than 2,500 survey respondents, 80% said they are having difficulty filling hourly craft positions. On a regional basis, 81% of contractors in the West and South report difficulty in finding craft workers, along with 80% in the Midwest and 77% in the Northeast.
“Labor shortages in the construction industry remain significant and widespread,” said Ken Simonson, AGC’s chief economist.
“The best way to encourage continued economic growth, make it easier to rebuild aging infrastructure and place more young adults into high-paying careers is to address construction workforce shortages.”
The figures underline the difficulties facing the majority of contractors in the US as growth in the economy helps boosts the construction industry and demand for skilled workers.
Simonson noted that construction employment expanded between July 2017 and July 2018 in 281 out of 358 metro areas that the association tracks—more than three out of four.
The lack of skilled labor is also forcing contractors to change the way they work and recruit craft workers, including hiking wages.
AGC said that 62% of construction firms report increasing base pay rates for craft workers because of the difficulty in filling positions, while 24% have improved employee benefits for craft workers and 25% report they are providing incentives and bonuses.
In addition, 25% report they are increasing their use of labor-saving equipment and an equal percent report using virtual construction methods such as building information modeling.
With no relief from the lack of skilled labor in the near-term, costs continue to creep higher as companies struggle to find workers and the price of materials also continue to surge.
Latest Labor Department data shows that the producer price index for inputs to construction industries, which is a weighted average of all goods and services used in construction, was unchanged from June to July — but has surged 8.1% since July 2017.
“We just can’t find people that want to learn the trade. We’ve got to the point where we are now having to turn work away because we simply don’t have the manpower,” the owner of one flooring contractor in Cleveland told Construction Dig.
“The industry is doing really well at the moment and it doesn’t matter how much money clients are willing to pay we’re having to turn down work. We’re booked out for almost the next 12 months.”
In June, AGC called on Congress to revamp the immigration system to help alleviate a deepening skills shortage that is crippling the sector.
A detailed report published by the US Chamber of Commerce and the USG Corporation at the end of last year showed that 95% of contractors have major issues hiring skilled workers for their construction projects.