There are, increasingly, construction projects to be done, and not enough workers to do them.
According to US News & World Report, some 225,000 projects were undertaken across the U.S. each month in early 2018, but a whopping 91 percent of the contractors who undertook them said they lacked sufficient manpower.
How acute is this shortage? So acute that Mike Bellaman, president and CEO of the trade group Associated Builders and Contractors, told CNBC last November that the hiring of 330,000 workers in ‘18 only began to address it. With the economy on an uptick and some $1.3 trillion in projects begun that year, Bellaman said, another 400,000 to 500,000 laborers are needed.
The ripple effect is dramatic, the solutions not entirely clear. The average delay for a construction project is now five months. In 2017 it was three. Two years before that, it was not uncommon for projects to be completed ahead of schedule.
These delays, which result in lost income for developers and increased costs on construction loans that often carry floating interest rates, are not likely to abate any time soon.
In the multifamily space, the labor shortage also contributed to a slowdown in apartment completions. It was estimated in August 2018 that only 283,000 apartments would be finished by year’s end nationwide, nearly 35,000 fewer than in 2017. It was the first time in seven years that fewer apartments had been built than the year before.
Some 2.3 million construction jobs were lost between 2006 and 2011, a result of workers leaving the industry during the recession and never coming back, as well as some other factors. For one thing, many Baby Boomers departed the workforce. For another, there was the demise of the shop class in high schools, and an emphasis on students earning college degrees as opposed to learning a trade.
More recently the immigration crackdown has had a deep impact, as some 30 percent of the construction workforce is foreign-born.
Construction companies are attacking the problem from all angles. To retain top-notch workers they are offering incentive packages that include not only generous compensation and regular raises but also sweeteners like healthcare and paid time off. To attract young workers they are offering on-the-job training.
There are also grassroots campaigns geared toward making students understand that working with their hands is as much of an option after graduation as college is. At Milton Hershey School, a boarding school in Hershey, Pa., students learn the trades by building houses; over the course of the school’s long history — it dates back to 1909 — they’ve erected 52 of them in the local community.
For older workers there are things like Home Depot’s $50 million skills program, and a Baltimore-based initiative called Project Jumpstart, in which prospects receive a stipend while receiving regular instruction about the industry.
Anything to bridge the gap, to replenish a workforce badly in need of same.