Construction Labor Shortage Statistics - featured image

21 Interesting Construction Labor Shortage Statistics

By Blog

If you’ve been keeping tabs on our site, you’ll know all about housing statistics. But what about the construction workers needed to build these houses? 

Take one look at the US construction industry statistics, and you’ll be able to confirm for yourself: we’re in deep trouble. 

We’ve got an ever-growing number of construction labor jobs, but nobody seems to want them. Is there a shortage of construction workers? Yes. 

Can this workforce shortage be amended? Yes. 

Fascinating Construction Labor Shortage Statistics Facts

  • 80% of construction firms have difficulty filling positions
  • There are 338,000 vacancies in the construction industry 
  • The US unemployment rate is 3.6% 
  • 71% of all contractors struggle to stick to deadlines
  • 61% of firms plan to increase their headcount in the next 6 months 
  • Construction costs have increased by 5.16% 
  • 10,000 baby boomers are retiring per day
  • Number of construction workers in the US: 1.5 million

Construction Labor Shortage Statistics

We’ve all seen the headlines and heard the news reports. We know there is a construction labor shortage. Let’s take a closer look at the numbers that make up the construction labor shortage statistics

1. The US unemployment rate is currently at 3.6% 

(Source: National Conference of State Legislation) 

The national unemployment rate of 2019 has been up and down throughout the year. In January, the unemployment rate was at 4% and by September had dropped to 3.5% only to creep back up to 3.6% in October. 

According to Trading Economics analysts, this percentage is expected to rise to 3.7% before the year is over. There is a nationwide workforce shortage, and the construction industry statistics you’re about to read attest to this.    

 2. 80% of construction firms are having trouble filling positions 

(Source: AGC – The Construction Association) 

An industry-wide survey conducted with nearly 2,000 respondents revealed that 80% of construction firms are experiencing difficulty filling positions. 

Of the surveyed firms, 73% believe that it is and will become more difficult finding appropriate workers to fill their positions, and 45% blame this on a skills shortage and lack of proper preparation.  

3. There are 338,000 vacancies in the construction industry 

(Source: Bureau of Labor Statistics) 

In September, the number of construction labor jobs that are unfilled was 338,000. By 2026, an estimated 747,000 positions will need to be filled as the demand for new buildings and infrastructure is increased by population growth and urbanization.  

4. 29% of firms are offering bonuses and incentives

(Source: AGC – The Construction Association) 

The number of unfilled positions and the difficulty filling them has had a positive knock-on effect in the way construction firms view the recruitment process. In order to combat the construction labor shortage issue, 66% of construction firms have increased base rates. 

Firms are generous in their attempts to combat the construction worker shortage. In addition to higher pay, 29% of firms offered bonuses and incentives to construction workers, while 25% of firms increased their overall portion of benefit contributions.  

5. The effects: 44% of firms are raising prices, taking more time to complete projects 

(Source: Fox Business) 

Due to the shortage of construction laborers, 44% of construction firms are not only taking longer to complete projects but are also increasing their prices submitted for bids and contracts. 

Which brings us to our next section: what are the challenges and consequences caused by the construction labor shortage?  

Construction Labor Shortage Statistics - workers

Challenges and Consequences Caused by the Construction Labor Shortage

As you can see, the construction labor shortage is a real situation that has far-reaching effects. Let’s take a look at some of the prominent challenges and consequences caused by the shortage & who are impacted by them. 

6. 43% of construction companies are concerned about the cost of skilled labor while 49% have to turn projects away 

(Source: US Chamber of Commerce) 

Perhaps the group that feels the pinch of these skilled labor shortage statistics more than any other party are the construction companies. 43% of construction contractors are highly concerned about the rising cost of skilled labor. 

Another detrimental effect of the labor shortage is that 49% of construction companies are unable to meet the growing demand and are forced to turn down opportunities.   

7. Jobsite safety is impacted – say 80% of contractors 

(Source: US Chamber of Commerce) 

80% of contractors state that job site safety is impacted by the skilled labor shortage. Fears of declining job-site safety are becoming more evident. 

This fear stems from skilled labor shortages, shorter construction schedules, the complexity of projects, aging workforce, language barriers, and the usage of opioids & other addictive substances on job sites.  

8. 81% of construction firms ask workers to do more work 

(Source: US Chamber of Commerce) 

One of the significant effects of the skilled labor shortage is that 81% of firms ask their workers to do more work. While this is a positive effect in terms of overtime earned, the negative effects far outweigh this positive. 

Workers are at risk of being overworked, and the overall employee experience can be jeopardized. In addition to this, working excessive amounts of overtime increases the risk of:

  • High blood pressure
  • Back injuries
  • Mental health issues
  • Alcoholism

9. Construction costs have increased by 5.16% 

(Source: Turner Construction) 

Since the third quarter of 2018, the cost of construction has risen by 5.16%. While this substantial price increase is mostly a result of the labor shortage, the rising cost of materials is also a contributor.

52% of contractors believe that they will spend more on tools, materials, and equipment needed to complete jobs on time successfully. 

Speaking of time: 

10. 71% of contractors have difficulty meeting schedule requirements

(Source: US Chamber of Commerce) 

A whopping 71% of all contractors struggle to stick to deadlines. In the cases of larger companies, in particular, this percentage increases to 76%.  

Failure to meet schedule requirements results in a lower level of customer satisfaction and negatively impacts the bottom line of construction companies. After all, time is money, right?

Construction Labor Shortage Statistics - working

Construction Labor Shortage: Solutions and Measures Taken

So what is being done to fight against the construction labor shortage?  Here are some insights as to the solutions and measures the construction industry is taking. 

11. Construction technology startup funding surged by 324%

(Source: Tech Crunch)

Startups are helping construction companies see the light at the end of the labor shortage tunnel by developing innovative new technology. In 2017, funding for construction technology startups amounted to $731 million, and by 2018 that figure had exceeded the $3 billion mark.  

29% of firms are investing in technology that aims to supplement laborers’ duties by automating processes. 

12. AI for the construction industry forecast to reach $4.51 billion by 2026   

(Source: Reports and Data)

The construction industry is seeing the value of AI and how it can help them maneuver these tough times. AI for construction is forecast to reach $4.51 billion in the next few years.

Who knows, with more companies introducing AI technology to lighten the load of labor shortages may be more millennials will be tempted to join the construction industry after all.  

13. 24% of construction firms are investing in labor-saving machinery 

(Source: AGC – The Construction Association)

24% of construction firms are investing in labor-saving machinery and equipment. Examples of machinery include GPS-guided equipment such as excavators, 3D printers, and grading machines.   

14. Off-site construction can demonstrate savings of $20 billion per year

(Source: McKinsey )

Preliminary findings indicate that construction companies can save up to $20 billion per year with off-site construction. In addition to the financial savings, off-site construction can cut schedule time by 20% – 50% as well as reduce a project’s construction labor costs by up to 25%.  

In spite of these promising statistics, only 23% of construction firms have reduced onsite work time. 

Reasons for the Construction Labor Shortage

Now that we know all about the construction labor shortage statistics that pose a threat to our nation’s development and economy, it’s time to look back. Why is America in a construction labor shortage? 

15. Millennials make up 35% of the global workforce: and they don’t want to work in construction 

(Source: Statista) 

At the moment, 35% of the global workforce is comprised of millennials. This number is forecasted to rise to 70% by 2020. A mere 6% of the workforce is made up of boomers. The remainder of the workforce is made up of 35% Generation X’s and 24% members of Generation Z. 

Factors contributing to millennials’ lack of interest in joining the construction industry are varied. From the unflattering portrayal of blue-collar workers in the media to the seemingly unattractive work culture and lack of career growth opportunities, millennials aren’t keen on solving the skilled worker shortage. 

16. 10,000 boomers are retiring daily 

(Source: Investopedia) 

An estimated 10,000 baby boomers are retiring per day. The construction industry has over 1.8 million baby boomer employees who are aged 55 to 64 years. 

The baby boomer retirement is sparking fears that the construction labor shortage will only worsen. Not only does this mean that the number of skilled workers will decrease, but a decline in management and leadership positions will likely ensue.    

17. 2 million construction jobs were lost during the recession 

(Source: AGC – The Construction Association) 

During the Great Recession, more than 2 million construction workers were laid off. This brings about the question: whatever happened to those people and why aren’t they filling the available jobs?

The answer to this is mostly speculation. Logic dictates that upon being laid-off construction workers had to seek employment in other industries, or hung up their tool belt if they were near retirement age anyway. The recession is a leading contributor to the construction worker shortage of today. 

18. 30.7% of laborers are Hispanic or Latino: thus a language barrier is formed

(Source: Bureau of Labor Statistics) 

When we consider that 30.7% of the 11 million people employed in the construction industry are made up of Hispanic or Latino people, it is easy to understand how a language barrier might present itself.

The language barrier can lead to the misunderstanding of instructions and increased risk of injury thanks to safety materials only being published in the English language.   

19. Lack of innovation in the hiring process. But 46% of firms are changing this 

(Source: AGC – The Construction Association) 

The construction industry has never been known for its innovation hiring process, which could be partly to blame for the current shortage of laborers. 

Now 46% of firms are increasing the level of in-house training, 27% are changing their hiring process, and 31% are offering overtime as well as hiring interns. In addition to these stats, more firms are hiring women to work as laborers and employing more veterans.   

Construction Labor Forecast

Now that we know what the current US construction industry statistics are and how they ended up that way, it’s time to look forward and focus on the future. So what does 2020 have in store for the construction industry? 

20. There are 4 prominent construction trends for 2020 

(Source: Southern California Contractors Association) 

  • Sadly, the construction labor shortage is forecast to continue into 2020 so a big trend in the industry will be combatting this issue
  • More effort will be targeted at increasing the level of safety on job sites through wearable technology and personal protective equipment 
  • More construction work will be conducted off-site and will reduce construction labor costs, material costs & increased ability to meet deadlines
  • Projects are likely to become more sustainable, resource-efficient and environmentally responsible   

21. 61% of firms are planning to expand headcount over the next 6 months 

(Source: US Chamber of Commerce) 

At the end of the third quarter, a whopping 61% of contractors reported that they expect to expand their headcount over the next 6 months. 

35% of contractors stated they would be keeping their headcount as-is, and 1% of contractors plan on taking on fewer new employees. The remaining 3% are unsure.   

Construction Labor Shortage Statistics - photo

FAQ

Before we share our final thoughts with you, we’re going to answer some of those burning questions. If the question you’d like to ask is not answered down below, you’re welcome to leave us a comment, and we’ll get back to you. 

Is there a shortage of construction workers?

(Source: Plan Grid) 

The short answer is: yes. This construction labor shortage can be attributed to millennials overlooking job opportunities in the construction industry, baby boomers retiring, outdated hiring processes, language barriers, and an overarching lack of skilled workers to fill the vacancies.  

Where are construction jobs in demand?

(Source: Zippia) 

The shortage of construction jobs is felt across the nation. However, the five best states for construction jobs that currently have the highest demand are:

  • Illinois 
  • California
  • Washington 
  • Wisconsin 
  • Minnesota
How many construction contractors are there in the US? 

(Source: AGC – The Construction Association) 

The construction industry has over 680,000 construction contractors that employ over 7 million people. These contractors create structures that are worth up to $1.3 trillion every year. 

How many construction workers are there in the US in 2019? 

(Source: Data USA) 

Given the real estate trends of 2019, one would think that there are more than enough construction workers to go around. But as it turns out, the construction labor workforce is made up of a meager 1.53 million workers. 

Of this number, 1.48 million are male, and 50,000 are female. It’s said that 71.1% of all construction laborers are caucasian.

Which construction job pays the most?   

(Source: Salary.com) 

Construction managers earn the highest salary. As of October 2019, construction managers were earning an average salary of $110,619, with the typical range being between $95,665 and $126,398. 

In contrast, construction workers earn an average salary of $36,323, with the typical range being between $32,278 and $40,334.  

How many construction workers die annually? 

(Source: Bureau of Labor Statistics) 

If you’ve read our construction injury statistics article, you probably have some unanswered questions. Call it morbid curiosity, but a lot of people have been wondering: how many construction workers die annually? 

The latest available data was released in December of last year and reflected the number of deaths that occurred in 2017. A staggering 1,013 construction workers lost their lives during 2017. The deaths of construction workers in previous years are as follows: 1,034 (2016), 985 (2015), 933 (2014), and 856 (2013). When we average those numbers out, that means that 964 construction workers die annually.   

The Census of Fatal Occupational Industries for 2018 will be released on Tuesday, December 17, 2019. 

On a brighter note: you made it to the end of this article! 

Wrap Up

Congratulations on educating yourself on all things relating to the construction worker shortage. Are you going to pick up the tool belt yourself and help solve this conundrum? Or are you going to sit back, relax, and watch an industry innovate to survive? 

If you have any thoughts on the construction labor shortage statistics we’ve shared with you today, the comments section below is at your disposal.   

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