Lack of construction workers threatens infrastructure efforts: AGC

Construction firms are struggling to find workers to such a degree that it’s threatening the success of federal investment in infrastructure and manufacturing projects, the Associated General Contractors of America said Wednesday.

Citing its annual construction workforce survey of nearly 1,300 employers commissioned with tech provider Autodesk, AGC said 93% of construction firms have open positions, and 91% are having trouble filling them, particularly among the craft workforce that performs the bulk of onsite construction work.

The shortages ran the gamut of firms, from contractors who exclusively use union craft labor and those that operate as open-shop employers; from companies making $50 million to $500 million in revenue; those in all four regions of the country and ones that focus on building construction, highway and transportation projects, federal and heavy work or utility infrastructure.

‘Almost nobody out there’

“Construction workforce shortages are severe and having a significant impact on construction firms of all types, all sizes and all labor arrangements,” said Ken Simonson, the association’s chief economist, in a statement.

Citing July’s construction unemployment rate of 3.5%, which was lower than that of the overall economy, he said, “that essentially means there’s almost nobody out there with construction experience looking for a new job in construction.”

The AGC’s survey came on the heels of this week’s job openings report from the Bureau of Labor Statistics, which found there are 375,000 unfilled positions in construction currently, a jump of 11.3% from a year ago.

Safety concerns, higher costs

During a webinar to detail the results of the AGC’s survey, Stephanie Simpkins, president of Liberty Lake, Washington-based traffic control contractor Northstar Enterprises, said a shortage of workers is impacting the safety of her jobs.

“Our projects encounter much longer hours worked than we would have in the past because we don’t have people to relieve others,” Simpkins said, describing the domino effect of fewer breaks for workers due to fewer people being on each job. “This year in particular was a real struggle to man all of our projects and do it in a way that keeps everybody safe.”

Stephen Sines, vice president of operations in the Florida office of the Danbury, Connecticut-based Morganti Group, said the lack of workers is forcing projects to take longer, which breaks their budgets.

“We haven’t seen any infrastructure projects be canceled, but we certainly have seen extended durations as a result of lack of labor, which also results in higher costs,” Sines said.

On the manufacturing front, Brian Turmail, AGC’s vice president of public affairs and strategic initiatives, pointed to chip giant Intel’s gargantuan task of finding 7,000 construction workers to build two semiconductor fab plants in Ohio.

Combined with the surge of work that’s expected from last year’s $1.2 trillion infrastructure law as well as the recently passed $52 billion CHIPS Act and the $739 billion Inflation Reduction Act, there will be demand for a volume of construction workers that, in many markets, simply doesn’t exist.

“The challenge is that as these projects could take longer to build and become more expensive, communities that may have thought they were going to build ten new roads are going to build seven,” Turmail said. “That’s what we mean about not meeting potential.”

Calls for immigration reform

Among potential solutions, contractors on the call talked about more education to train workers, promoting the fact that construction offers lucrative pay without a college degree and reaching out to people who were formerly incarcerated. A full 77% of respondents to the survey said their biggest challenge in finding workers is that available applicants simply don’t have the construction skills to do the job.

Participants on the call said that immigration reform was desperately needed to enable the current investment in infrastructure to be as effective as those during past generations.

“Construction is one of many industries that historically relied – much more than they’ve been able to in the last three years – on foreign born workers,” Simonson said. “The federal government could revert to allowing more people in, particularly if they’re screened first, and if a contractor can demonstrate the need to fill that position.”