Recent projections from the Bureau of Labor Statistics suggest nearly half a million job openings in construction. All these unfilled positions will likely spur wage growth. Unfortunately, the labor shortage has its downsides as well.
An aging workforce
Factors from every sector of the economy as well as demographics suggest demand for construction jobs will increase while the labor supply remains low. A recent federal infrastructure bill will require an estimated 3.2 million workers, but some analysts worry there won’t be enough workers available to do the job. Currently, 20% of construction workers are over 55 while the share of those 25-54 has declined by 8%.
Relatively low wages don’t help matters. Construction wages have fallen compared to other industries. When they compare construction wages to the wages in other industries, younger workers may tend to seek work in other sectors of the economy. The result creates a generational challenge in the supply of skilled workers.
Education and immigration
Technology and increased immigration may provide long-term solutions. Employee retention and education can stem the decline in trained workers. The Associated Builders and Contractors Association estimates the construction industry will require 650,000 workers more than their normal hiring practices to fill shortages. Additionally, an estimated 1.2 million workers will leave the construction job to work in a different industry altogether. One Florida university recently adapted its curriculum to address this deficiency statewide.
The long-term impact of a labor shortage in construction has merged with the red-hot real estate market. Property transfers can occur sight unseen or without a home inspection. Attorneys who understand the construction industry can explain how the trends may affect your real estate purchase.