As open construction jobs decrease, more skilled labor is needed
The count of open construction jobs decreased from a revised reading of 404,000 in February to 341,000 in March, according to the latest Job Openings and Labor Turnover Survey (JOLTS) from the U.S. Bureau of Labor Statistics and analysis from Associated Builders and Contractors (ABC).
The JOLTS defines a job opening as any unfilled position for which an employer is actively recruiting. Industry job openings decreased by 63,000 last month and are down by 72,000 from the same time last year.
“The March JOLTS data indicate a significant decline in open positions in the construction industry,” said Associated Builders and Contractors Chief Economist Anirban Basu. “Job openings fell to their second-lowest level since mid-2021.”
Basu notes that the 3.7% of construction workers who were laid off or discharged in March is the highest rate since the early months of the COVID-19 pandemic. The 9.6 million jobs openings in March across all industries was the lowest number since April 2021.
“Only 9.4% of ABC members expect their staffing levels to decrease over the next six months, according to ABC’s Construction Confidence Index,” said Basu. “Given this relatively upbeat outlook from ABC contractors and the fact that the residential segment lost jobs in March, weakness in the single-family homebuilding sector likely accounts for much of the decrease in job openings."
Bruno Schickel, president of Schickel Construction based in Dryden, N.Y. and a longtime member of the National Association of Home Builders (NAHB), recently testified before Congress on the labor shortage in the residential construction industry and the need to promote vocational career paths.
Schickel told lawmakers that “going to college is not the only way to get an education. I wanted to make things, I did not want to go to college.”
He also noted that he is the first person in his family in many generations not to go to college.
Schickel started his company in 1984 and has consistently employed 10 to 15 people throughout the past 39 years, but he said the construction labor shortage is “nothing short of a crisis” and it is affecting his business as well.
“I know that for my business we could easily increase volume by 20 to 30% if we had more workers,” he said. “The National Association of Home Builders estimates that we will be short 2.2 million workers in the next two years.”
Robert Dietz, chief economist of the NAHB, notes that the construction job openings rate decreased to 4.1% in March. “The recent trend of these estimates points to the construction labor market having peaked in 2022 and is now entering a cooling stage as the housing market weakens,” Dietz wrote in an Eye on Housing blog post.
But Dietz notes that despite the weakening that will occur in 2023, the housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory.
Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years, according to Dietz. “While a slowing housing market will take some pressure off tight labor markets, the long-term labor challenge will persist beyond the ongoing macro slowdown,” he said.
Schickel told lawmakers that over the past 50 years, too much emphasis has been put on attending college, and too little on finding a rewarding career in a trade.
“Resources for vocational and technical training have declined,” he said. “Many public schools no longer offer shop class, preventing young people like the kid I was from having access to a very rewarding variety of careers. We need to restore balance. Let’s bring back shop class.”
In the meantime, ABC has knocked the construction industry’s federal and state government-registered apprenticeship system and noted that it has resulted in just 45,000 people completing to four-to-five year program in 2022.
ABC also said it would take 12 years for federal and state government-registered apprenticeship programs to educate the more than half a million workers the construction industry needs to hire in 2023,
