NEWS: As US labor demand cools, construction is still hot

In many industries in the US, job openings and worker quit rates dropped last month, according to the Bureau of Labor Statistics. For construction, the labor pool is still too shallow.

The nationwide demand for labor is dulling, but construction still faces a shortage of workers. Construction counted 363,000 job openings at the end of July, according to the Bureau of Labor Statistics, a decrease of 23,000 jobs from June. 

That’s still 10,000 more unfilled positions compared to the same period a year ago, or about a 3% increase. The percentage of open jobs for which contractors actively seek workers also dipped slightly in July: 4.4% of construction jobs went unfilled. Nevertheless, that’s still greater than in July 2022 and at the beginning of the pandemic, according to Anirban Basu, chief economist for Associated Builders and Contractors.

The number of nationwide quits, which BLS says can measure workers’ willingness or ability to leave jobs, dropped by nearly 12% year over year. But in construction, that number dipped just 4.1%.

“Across all industries, job openings are now at the lowest level since March 2021 and the rate at which workers are quitting their jobs has returned to the pre-pandemic norm,” said Basu. “Unfortunately, the demand for construction workers remains elevated relative to supply.”

As inflation takes its toll on consumers and higher interest rates weaken growth, the high demand in the labor market should continue to cool down, Basu said. ABC members continue to indicate they will increase hiring efforts over the coming months, and are unlikely to lay off workers, he said.

Money entering the industry from legislation like the CHIPS Act is also straining the construction labor supply. 

Even as billions flow into the U.S. manufacturing sector, the number of available skilled workers directly impacts the bottom line and schedule of major projects. In states like Arizona, New York, Ohio and Texas where multiple megaprojects have recently broken ground, contractors find themselves competing for the same skilled workers required to deliver a multibillion-dollar plant.

“And I emphasize the word skilled because this is not an ordinary form of construction, this is precision construction,” Basu told Construction Dive earlier this month. “You really need a very skilled workforce, and we just don’t have enough of those people.”

The source for this hardhatNEWS article is Construction Dive