Even before COVID-19 hit, we knew the construction industry was facing a significant labor shortage. Over the years, we have watched as the number of firms that say it will either become harder to recruit and hire qualified staff creep up. Now, a few reports are assessing the current conditions amid a pandemic.
Starting with some good news first, the U.S. Chamber of Commerce Commercial Construction Index shows that commercial contractors are expressing optimism about the future, with the overall index score increasing by one point, although still below the score from the first quarter of 2020. Also, now, 82% of contractors have moderate to high confidence that the U.S. market will provide sufficient new business opportunities in the next 12 months.
Here we see confidence in new business rose six points to 56 in the third quarter from 50 in the second quarter, while revenue expectations increased four points to 48 in the third quarter from 44 in the second quarter. However, the one area to note: the current backlog, which dropped five points to 68 from 73.
The caveat is this: Roughly one in three plan to hire more workers in the next six months, but 83% report moderate to high levels of difficulty in finding skilled workers.
If we dig a little bit deeper, we see that the COVID-19 pandemic is creating more havoc in an industry that is already struggling with a labor shortage, according to another new report.
Now, we see roughly 52% of construction companies are struggling to find craft workers amid fears of COVID and unemployment supplement. The report from AGC (Associated General Contractors of America) shows that in addition to turning to technologies to alleviate labor shortages, roughly 38% of firms report having increased base pay rates to attract and retain workers. This is in an industry that is also already struggling, due to the pandemic, with the majority of companies having at least one future project postponed or canceled because of the virus.
Many of the construction companies in the AGC study are calling on Washington officials to help the industry. Roughly 55% of those surveyed want Congress and the Trump administration to enact liability reforms to shield companies who are protecting workers from the coronavirus from needless lawsuits, while another 41% want Congress to address unemployment benefits that serve as artificial barriers to returning people to work.
We know the labor shortage has been an ongoing challenge for years, and now the pandemic adds a new layer of considerations for an industry that is already short-staffed. While tech can help fill in some of the gaps, we need a more concentrated effort across the board to solve this shortage together.