There were some impressive statistics from 2017 with regard to employment numbers in the construction industry. Not only did construction jobs reach their highest level since November 2008, but construction salaries also rose as well. These overall improvements are bolstered by the fact that recent tax reforms will likely increase wages by lowering the overall tax burdens for employers.
Construction Industry Growth
Chief economist with the Associated General Contractors of America (AGC) Ken Simonson said, “Employment and pay in construction have risen more rapidly over the past year than in the economy overall, as the supply of unemployed, experienced workers continues to shrink. With unemployment so low overall and in construction, contractors are likely to have increasing trouble filling many types of hourly craft and salaried openings.”
- Construction employment increased by 24,000 jobs in November 2017 alone.
- Construction employment totaled 6,955,000 in November 2017.
- 184,000 construction jobs were added during 2017.
- Residential construction added 14,800 jobs in November and 85,900 jobs over the past 12 months.
- Nonresidential construction employment increased by 8,600 jobs in November and 97,700 positions, or 2.4 percent, over 12 months.
- The number of unemployed jobseekers with recent construction experience fell to 467,000 in November, down from 517,000 in November 2016.
- The unemployment rate in construction dropped to 5.0 percent last month from 5.7 percent a year earlier.
Average hourly earnings went up to $29.17, a 2.9 percent increase from 2016. But Officials in the construction industry said that one of the reasons wages haven’t risen more quickly, is from the overall low profit margins of most projects as firms attempt to cope with industry pressures: increased costs in regulatory compliance, rising healthcare costs, and increased competition. Yet, tax reform is likely to reduce the burden on firms, giving them more leverage to increase wages as they make strides toward growing their teams.
AGC’s chief executive officer, Stephen E. Sandherr explains, “Given current labor market conditions, it is reasonable to assume that many construction firms will take advantage of tax cuts to boost pay and benefits. Increasing wages should attract more young people into the industry, while boosting overall economic activity.”
Skilled Labor Crisis
Even though employment levels continue to rise, a labor shortage persists within the commercial construction industry. From assisted living construction to institutional construction, the industry continues to rebound from losing workers who changed careers out of necessity during the recession. Also, a growing number of commercial construction workers are in their 50s and 60s and are looking to retire soon. If you’re experiencing a labor shortage, then it’s likely effecting your ability to bid on new construction jobs. Here are some strategies that can help alleviate labor issues.
- Join forces with other construction teams to expand your team size and get the job done. It can take several weeks, or even months to fill job vacancies using traditional methods. Joining forces with another construction team can be very cost-effective, efficient way to locate qualified workers.
- Partner with an experienced executive recruiter. Recruiting consultants work on your behalf to search, screen, qualify, and present only those candidates who meet the requirements saving firms substantial time and energy.
- Get more involved on high school and middle school campuses to raise awareness for the demand for skilled construction workers to fill high-paying construction jobs with upward mobility. Construction companies can send representatives to high school career days, job fairs, and on-campus events to raise awareness. Or, consider sponsoring scholarships for those students interested in construction careers upon graduation.
Job growth and rising wages in the construction industry signal more growth ahead. These improvements will likely be followed by more rising wages from the recent tax reforms. Even though there continues to be a skilled labor shortage, construction firms seem optimistic about future growth.
Are you ready to build your dream team?
The Birmingham Group is a tenured construction recruiting firm dedicated to helping you build your dream team. If you are ready to take a proactive approach to recruiting and retention, reach out today to discuss a custom recruitment strategy.