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Report: 80% Of Contractors Struggle To Fill Needed Positions, Lengthening Construction Timelines

The construction site at 218 Arch St. in Philadelphia in 2016

The construction labor shortage over the past few years has deepened to a point that is impossible to ignore.

At least 80% of contractors struggle to fill hourly positions for craft workers, a new survey from industry group Associated General Contractors of America reports. Hourly craft positions make up the bulk of the construction industry's workforce, according to the AGC.

Tariffs imposed on China, Mexico and Germany for construction materials like steel and lumber have been in place for some time now and have driven up the price of such goods considerably. But as major cities and the logistics industry remain demand drivers for new construction, the lack of available labor has been a bigger influence on rising development costs for the past few years.

Across the U.S., 43% of construction firms reported that their costs had been higher than anticipated due to labor shortages, while 44% reported having to lengthen project timelines because of the issue, the survey found.

An AGC survey from last year also reported that 80% of contractors had difficulty hiring for hourly positions, and 56% had difficulty hiring salaried workers. Those numbers have persisted to this year even as most respondents claim to have raised wages and sought new methods to require less labor, according to the 2019 report.

“Workforce shortages remain one of the single most significant threats to the construction industry,” AGC CEO Stephen E. Sandherr said in a statement accompanying the report. “However, construction labor shortages are a challenge that can be fixed, and this association will continue to do everything in its power to make sure that happens.”

Several factors hamper the construction industry's ability to grow its labor force: the long decline of labor unions, persistent gender and racial bias in recruitment practices and a reorganization of the labor market in general since the Great Recession.

Even as the AGC recognizes the need for change, 73% of survey respondents believe that finding labor will either remain as difficult or become even more so in the years ahead.