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Demand for construction workers remains high as overall U.S. labor demand dips

2023-09-01T17:47:00-04:00

The nationwide demand for labor is dulling, but construction still faces a shortage of workers. Construction counted 363,000 job openings at the end of July, according to the Bureau of Labor Statistics, a decrease of 23,000 jobs from June.

As noted by the chief economist for Associated Builders and Contractors (ABC), Anirban Basu, job openings, across all industries, are at the lowest level since March 2021, and the rate at which workers are quitting their jobs has returned to the pre-pandemic norm. The demand for construction workers, however, still remains high. Last month's 363,000 job openings are still 10,000 more than the amount during the same period last year.

The recent dip in labor demand has been attributed to continued inflation and higher interest rates. According to Construction Dive, ABC members have indicated that they will still increase hiring efforts and are unlikely to lay off workers. Money entering the construction industry through legislation aiming to spur major projects is straining the pool of labor as contractors are competing for the same skilled workers.

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Construction job openings decrease along with fewer quits in October according to ABC study

2022-12-12T09:10:00-05:00

Construction filled more hard hats in October, as the total job openings dropped by 52,000 from a month earlier to 371,000, or 21,000 fewer vacancies than in October 2021, according to an analysis of Bureau of Labor Statistics data by Associated Builders and Contractors (ABC).

The U.S. Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) program defines a job opening as any unfilled position for which an employer is actively recruiting. While October's reading is promising, given a looming recession and labor shortages, 4.6% of all construction positions remain unfilled, which is more than at any point from when this data started to be gathered in 2000 through 2018.

However, on a brighter note, the number of workers who quit their job across all sectors fell to its lowest level since May 2021. The Associated Builders and Contractors anticipate increasing construction industry job openings even as the U.S. economy weakens.

Dodge Momentum Index continued its ascent through October

2022-11-07T13:35:00-05:00

The Dodge Momentum Index (DMI) continued to steadily rise in October, with a 9.6% boost to 199.7 from the revised September reading of 182.2. This increase was driven by a 13% and a 2.9% rise in the commercial building and institutional building components, respectively.

As detailed by Dodge Construction Network, commercial planning was buoyed by an increase in office and hotel projects. Institutional planning was more varied, however, as it saw growth in recreational and education projects but also experienced declines in healthcare and public planning projects. On a year-over-year basis, the DMI was 28% higher compared to October 2021, with commercial planning up 29% and institutional planning 25% higher.

15 projects with a value of $100 million or more entered planning in October, with the leading commercial projects being a $206 million expansion to a resort in Henderson, Nevada, and the second phase of a $180 million office tower project in Omaha, Nebraska. Institutional plan...

Concern over shortage of construction workers in Florida following Hurricane Ian damages

2022-10-06T18:20:00-04:00

Damage caused by Hurricane Ian’s massive storm surge, flooding and winds will require skilled workers to help the state of Florida rebuild. Staffing the projects to restore the state is easier said than done. Both Florida and the U.S. as a whole have many job openings and few skilled laborers. As some projects in the state halt, they may free tradespeople for other vital work.

Figures reported by Construction Dive indicate a cause for concern regarding a lack of skilled workers for the many openings available, which has been magnified in the wake of Hurricane Ian. The disaster, which hit Florida in late September, has resulted in billions of dollars in property damage, the displacement of more than 40,000 people, and the deaths of at least 106 individuals.

According to employment data from the U.S Bureau of Labor Statistics, the construction industry added 407,000 jobs in August, with Florida reaching 593,000 employed construction workers in that month. However, unemployment for those with construction experience was almost 4%, indicating that the number of openings trumps the quantity of construction workers looking to fill them. While this is alarming especially at a time when demand for workers is high, it’s believed that the work required in Florida will still attract skilled employees. Construction Dive highlights the presence of federal and state f...

Construction costs projected to see largest increase in years due to supply and demand pressures

2022-08-29T15:44:00-04:00

According to CBRE's new 2022 U.S. Construction Cost Trends report, nationwide industry price levels have posted the largest increase in years, driven by labor shortages, inflation, supply chain disruptions, the ongoing impact of the pandemic, and the war in Ukraine.

CBRE forecasts a 14.1 percent year-over-year increase in construction costs by the end of the year, an increase from last year’s 11.5 percent gain. This 2022 figure is the largest increase since CBRE began tracking cost projections in 2007, exceeding the average rise of 2 percent to 4 percent per year. Following 2022, CBRE predicts cost increases to decline back to their historical range at 4.3 percent next year and 2.9 percent in 2024 as supply chain issues, inflation, and material production difficulties ease.

“The construction industry thrives on predictability, but we continue to grapple this year with nume...

Dodge Momentum Index rises an additional 7% in May, indicating secure construction sector amidst uncertain economy

2022-06-08T15:11:00-04:00

The Dodge Momentum Index rose 7% in May to 176.2, up from the revised April reading of 165.2. The institutional component of the Index rose 9% and commercial planning rose 6%.

May’s increase pushed the level of planning above the most recent cyclical high set in November 2021. Last month, commercial planning was led by an increase in office and hotel projects. Institutional developments were driven by an increase in education and healthcare projects entering planning. The Index is 17% higher in May 2022 compared to the same period in 2021, with commercial planning up 24% and institutional planning 8% higher than a year ago.

A total of 19 projects with a value of $100 million or more entered planning in May. The leading commercial projects were the $333 million Bitcoin Mining Facility in Corsicana, Texas and the $300 million Gun Lake Hotel and Resort in Wayland, Michigan. The leading institutional projects were the $250 million Drexel University life sciences building in Philadelphi...

Dodge Momentum Index yields another 4% increase in March

2022-04-08T13:43:00-04:00

The Dodge Momentum Index moved up another 4% in March to 166.9 from the revised February reading of 160.3. Last month, commercial planning rose 7%, while institutional planning fell by less than one percent.

Commercial planning in March was just slightly lower than the all-time high set in October 2021. However, this component of the Momentum Index has been much more volatile than institutional planning due to the presence or absence of large projects month-to-month. Compared to March 2021, the overall index was 17% higher in March 2022, with institutional planning up 23% over the year and commercial planning up 14%.

Previously on Archinect: Dodge Momentum Index recovers in February following 3-month stretch of decline

A total of 21 projects with a value of $100 million or more entered planning in March. The leading commercial projects were the $923 million third phase of the Atlas Power data center in Williston, North Dakota, and the $325 million Seaport San Diego Block F in San Di...

Dodge Momentum Index recovers in February following 3-month stretch of decline

2022-03-08T15:37:00-05:00

In February, the Dodge Momentum Index increased 4% to 158.2 from the revised January reading of 151.9, marking a rebound from three consecutive monthly declines that followed a 14-year high in October 2021. Last month, institutional planning rose 9% and commercial planning moved 1% higher.

The Dodge Construction Network attributes much of February’s gain to the sizable jump in the institutional sectors, in which more education and healthcare projects entered planning. Gains in commercial planning are due to office and warehouse projects. Compared to February 2021, the overall Momentum Index was 11% higher during the same time this year. Institutional planning was up 37%, while commercial planning was down 1% on a year-over-year basis.

Previously on Archinect: Dodge Momentum Index continues to fall into January

A total of 22 projects with a value of $100 million or more entered planning in February. The leading institutional projects were a $500 million first phase of the OC Vibe rec...

Dodge Momentum Index continues to fall into January

2022-02-14T13:15:00-05:00

The Dodge Momentum Index has continued to fall in January, yielding a 7% decline to a four-month low of 152.9 from the revised December reading of 163.7. Commercial planning fell 9% and institutional planning fell 1%.

Previously on Archinect: Dodge Momentum Index declines in November, remains near 14-year high

Last year, the Dodge Momentum Index reached levels not seen in nearly 14 years, rising 21% from 2020. The recent stretch of declines has been attributed to rising costs, logistical problems, and skilled labor shortages. However, despite this decrease, the dollar value of projects in planning remains strong, especially for education, warehouse, and healthcare projects.

January 2022 Dodge Momentum Index. Graphic: Dodge Construction Network

A total of 13 projects with a value of $100 million or more entered planning in January. The leading institutional projects were a $400 million hospital in Tahlequah, Oklahoma and the $320 million Ascension Seton Medical Tower in Austin, Texas....

Architect Duo Dickinson on the hazards of practicing in the pandemic economy

2021-12-22T18:39:00-05:00

Months of isolation made people rethink the way they wanted to live. That meant their buildings would change. That meant construction, and architects became useful again, after being abandoned. But the craziness of a new era has made all builders and architects simultaneously empowered by their new in-demand status while fully threatened by costs and availability of all the products and people necessary to build.

Earlier in the year, labor and supply chain issues had caused markets in steel and timber to skyrocket, delaying many commercial and residential projects industry-wide, in addition to triggering what some think will be a boom in demand once the pandemic subsides.

However bright the prospects are for some people, architect Duo Dickinson sees recent gains as part of a cycle which has become “insane and dangerous.”

Related Duo Dickinson feature article on Archinect: Everything Is Changing: But Not Architecture’s “Deep State”

“If the past is prologue, this boom shall soon bust,” he wrote. “The anecdotes of recent months are great in the construction world, but the articles and studies have not kept up with a chaotic time. In my little corner of this world, the last season has seen four of my clients dip their toes into building and use my firm to scope out the time and money involved, and when inflated numbers and indeterminable schedules were revealed, they simply opted out, even though...

Dodge Momentum Index declines in November, remains near 14-year high

2021-12-10T13:53:00-05:00

The latest edition of the Dodge Momentum Index indicates a 4% decrease in November from October. Commercial planning fell 8% while institutional planning moved 5% higher.

The value of nonresidential building projects continues to move in a sawtooth pattern, in which month-by-month measures alternate between gains and losses. Despite this, the Momentum Index remains near a 14-year high. As reported in Dodge Construction Network’s newest release, the index was 44% higher in November 2021 compared to November 2020. In addition, the commercial planning component was 45% higher and institutional planning was 41% higher.

Previously on Archinect: Non-residential projects in planning are at a 14-year high, according to new analysis

Since the start of the pandemic, nonresidential building projects entering planning have been more volatile, which is likely due to higher prices and shortage of labor.

A total of 10 projects with a value of $100 million or more entered planning in November. Th...

Builder confidence higher than expected with surging demand, despite supply chain disruptions, labor shortage, and lack of space

2021-11-16T19:58:00-05:00

Higher prices and longer wait times do not appear to be turning buyers away from the nation’s homebuilders. With demand still surging, homebuilder confidence in the market for single-family homes rose more than expected in November, to the highest level since last May

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder sentiment in the market for newly-built single-family homes moved three points higher to 83 in November. Readings above 50 indicate that more builders view conditions as good than poor. Lack of resale inventories combined with strong consumer demand has been attributed to the boost in confidence, despite ongoing supply chain disruptions and labor shortages.

NAHB Chief Economist Robert Diaz said that the construction industry currently has more than 330,000 open positions. Additionally, there is a lack of space, in which lot availability is at “multi-decade lows”. Diaz is calling on policymakers to focus on resolving these issues in order to meet the strong demand.

Metallica and Carharrt team up in initiative to attract new generation of workers in skilled trades

2021-09-07T15:22:00-04:00

Workwear brand Carhartt has teamed up with heavy metal band Metallica’s nonprofit All Within My Hands foundation in an effort to attract a new generation of workers in the skilled trades.

Carhartt announced that it is donating all online sales made this past Labor Day to the foundation’s Metallica Scholars program, an initiative dedicated to providing skills and services to students who are looking to enter a traditional trade or other applied learning program. It also provides direct support to 23 schools through the American Association of Community Colleges (AACC) to enhance their career and technical education programs.

The Labor Day campaign recreates a 1981 “Musicians Wanted” ad that was placed in a Los Angeles newspaper by Metallica drummer Lars Ulrich, which ultimately led to the formation of the band.

“To build the workforce of the future, we need to connect more people to the training and education that helps fill essential jobs,” said Janet Ries, Vice President of Marke...

Construction Labor Shortage Macroeconomics

2019-08-21T09:48:00-04:00

The No. 1 business issue for home builders, remodelers, and land developers continues to be access to skilled labor. According to NAHB analysis of Bureau of Labor Statistics (BLS) data, as of April of this year there were 404,000 open construction sector positions. Not only is this level of unfilled jobs in the construction industry at a post–Great Recession high, the current estimate is the highest ever reading for this data series, which runs back two decades.

According to Builder, "the intensity of the labor shortage among builders grew more intense during 2018 and 2019." The challenges of this shortage on the construction industry bring higher costs, delays, and lower output on projects. Economist, Robert Dietz, Ph.D. suggests that, "Wage growth in a sector is ultimately limited by productivity gains. If, to attract new workers, wages are required by supply and demand to rise faster than productivity growth, such hiring does not take place." He says this in turn creates a reduction in output within the industry.

Dietz's contention is that a macroeconomic/historical look at the situation provides reasonable answers. He believes that "lower tax rates and lower interest rates will spark additional business investment, which will in turn attract workers and raise productivity."