Construction firms are having issues finding skilled workers to fill job roles, and when they do, they are more expensive to hire. This trend is affecting all aspects of the construction sector. The nonresidential construction is particularly hard-hit.

The Drop in Construction Employees in Recent Months

Looking at the figures from recent months is all it takes to get a feel for the construction sector’s labor crisis. In February, overall construction employment dropped by 61,000. It also had an unemployment rate that reached 9.6%. That high unemployment rate comes from two main factors. These are the lack of new nonresidential projects and the severe winter weather.

Nearly all of the job loss occurred in the area of nonresidential construction. January saw 400 jobs disappear, followed by 60,800 in February. To put those figures in perspective, this is a year-over-year decline of 6.8% or 316,000 jobs.

An Increase in People Quitting

Worsening this labor shortage is the fact that by December 2020, more people chose to quit construction jobs than those whose employers discharged or laid off. Overall, 13,000 more people quit. Experts agree that this figure indicates that the labor market is very tight.

The Likely Cause of the Labor Shortage

Interestingly, the drop in construction jobs is partly due to a lack of jobs available, between severe weather and the pandemic. Another portion of it is the skilled labor crisis that has construction recruiting companies scratching their heads. Experts hoped that the massive layoffs in other industries and skilled labor from the pandemic would bring new construction workers. Others hoped that construction employees laid off at the beginning of the pandemic would return to the industry. But neither has occurred.

This trend of workers leaving the industry permanently during layoffs is not unheard of. However, it is not good for those looking for construction employees. For example, if you look at figures following the Great Recession, over 60% of those who worked in construction and lost their jobs were no longer in the industry by 2013.

Construction Employees Are Becoming More Expensive

This labor shortage is likely what is responsible for the increase in construction salaries. The hourly construction earnings reached a new all-time high in January 2021, at $32.11. Another factor that makes construction workers expensive is that they have the highest weekly average hours since Q3 2019. Combined, that translates into a high construction salary for those who find a job in the industry. This news is good to hear for those hoping to follow construction careers and essential to know for employers.

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