AGC: ‘Only a matter of time’ before construction labor shortage cripples broader US economy 

Dive Brief:

• Only 19 states saw month-over-month construction employment growth between April and May, while year over year, 39 states added jobs between May 2015 and May 2016, according to the Associated General Contractors of America.
• New Jersey (2,900 jobs, 1.9%) had the largest April-to-May job increase, while Oklahoma (2.2%, 1,800 jobs) had the biggest percentage gain. Year over year, California (39,600, 5.5%) had the biggest job growth, and Hawaii (19.7%, 6,700 jobs) had the highest percentage growth.
• Of the 30 states and Washington, DC, to lose jobs from April to May Texas (-3,400 jobs, -0.5%) gave up the most positions, while Vermont (-6.1%, -1,000 jobs) lost the highest percentage. North Dakota, once again, lost the most construction jobs, as well as the highest percentage, year over year (-3,700 jobs, -10.5%).

Dive Insight:

North Dakota persisted in shedding construction jobs as the energy sector in the state continued its retraction. However, the AGC pointed to a decrease in construction employment and high demand for workers as signs that sluggish monthly job growth was due to a shortage of workers, not an industry slowdown. Ken Simonson, chief economist for the AGC, said the construction industry seemed “robust,” as long as companies could find enough workers.

The AGC noted that one of its earlier surveys this year found that 71% of construction companies planned to ramp up their 2016 workforces, as they were generally optimistic about the future of the industry. However, those companies also feared a shortage of qualified workers would hamper their hiring and expansion plans. In response to this concern, the AGC has continued to call on lawmakers to take the steps outlined in its Workforce Development Program, which includes suggestions for immigration reform and increased funding for career and technical programs.

AGC CEO Stephen Sandherr said in a press release that “it is only a matter of time” before the skilled worker shortage affects the general economy now that it is starting to impact construction hiring. Earlier this month, the AGC and Bureau of Labor Statistics reported that the construction industry across the U.S. lost 15,000 jobs in May.

Earlier this month, the National Association of Home Builders analyzed the most recent BLS Job Openings and Labor Turnover Survey (JOLTS) data and found that the construction industry’s level of April unfilled jobs fell to 200,000, lower than March’s upwardly revised number of 215,00 but still high enough to be indicative of firms’ ongoing struggle to find enough skilled labor.