Skilled Labor: An Increasingly Scarce Resource
During the past
6 years, the U.S. construction industry shed more than 1.8 million jobs.
Construction unemployment reached its peak (27.1%) in February 2010, even though the broader
economy had been out of the recession for nearly a year. By February 2013, the
unemployment rate fell to 15.7%—lower than in previous years, but still well
above historic norms and U.S.
The decline can be attributed
to the industry’s ability to retain workers during recessions and then rehire
them afterward. When referring to this
cyclical economic phenomenon, the National Center for Construction Education
and Research (NCCER) concluded that industry recovery and labor recovery are 2
different things. Although the industry historically has survived economic ups
and downs, firms often cannot bring back lost workers who secured employment in
At the same time, pent-up demand for construction—particularly
infrastructure—has been building. The nation’s bridges, highways, water
systems, sewer systems, storm water
management systems, dams, and levies
continue to falter. Technological shifts also are contributing to pent-up
construction demand, as office buildings, hotels, and other structures
increasingly need to be retrofitted to improve performance.
Looking ahead, capital markets will heal, job creation will accelerate,
and the down cycle in construction will reverse. Much of this already is occurring, with residential construction starts rising during the last several quarters
and a handful of nonresidential construction segments, including power,
manufacturing, commercial, and office, showing signs of life.
The Next Construction Crisis
With activity picking up, a recent construction labor market survey conducted by the Maryland Center for Construction Education and
Innovation (MCCEI) confirms the next crisis for construction will not be from a
lack of demand, but from a lack of skilled craft professionals and construction
A revolution in the way
construction services are delivered compounds the emerging skills gap.
According to the MCCEI survey, 55% of respondents indicated that building
information modeling (BIM), mobile computing, Global Positioning System (GPS),
and other technological advancements represent the most important ways
construction will be delivered during the next decade.
Additionally, the Construction
Labor Market Analyzer’s 20/20 Foresight Report for the fourth quarter of 2012
projected a nationwide shortage of nearly 2 million workers. There are
approximately 5 million current U.S. nonresidential construction workers, with
cyclical demand expected to peak at 6.7 million in 2016, according to the
To put the shortage in
perspective, total employment during the current decade is expected to rise
14.3%, according to the U.S. Department of Labor. During the same period,
demand will rise 49% for reinforcing iron and rebar workers, 42% for glaziers,
40% for brick masons and block masons, 37% for stone masons, and 36% for
Much of the
industry’s expansion continues to be in energy- and natural resource-intensive
areas. Construction employment in North Dakota increased 9% in the past 2
years—more than in any other state. Other rapidly expanding states for
construction employment include Alaska (7.2%), Louisiana (5.9%), Wyoming
(5.1%), and Texas (5%).
States with elevated levels of industrial project volume, such as
Louisiana, will experience the highest level of labor demand. Those states
likely will drain the qualified and skilled workers from other parts of the
United States, which implies that skill sets and shortages likely will migrate
across the country over time. Contractors in construction-rich states such as
Texas and Louisiana will be in a better position to aggressively recruit talent
because they will be able to offer more generous compensation and relocation