U.S. contractors are struggling to meet the demand for nonresidential construction projects, according to new reporting by The Wall Street Journal. Despite a decline in residential construction triggered by rising interest rates, contractors have reported that spending on nonresidential projects has continued to surge.

Such sentiments are substantiated by recent figures from the U.S. Census Bureau, which found that spending on nonresidential construction in February was 17% higher than the previous year at $982 billion.

According to The Wall Street Journal, nonresidential construction activity has been boosted by new plants for electric vehicles, warehouses for e-commerce businesses, and manufacturers who are relocating operations to the U.S. after the fragility of global supply chains was exposed during the COVID-19 pandemic. Increased federal spending on public works projects, defense, and technologies such as electric vehicle batteries and semiconductor chips has also fuelled a demand for nonresidential construction workers which the industry is struggling to meet.

“There’s not enough talent in the market to do all the jobs that are out there,” one contractor told the WSJ. “We say ‘no’ to projects more than we say ‘yes’ these days. It’s part of managing our risk.”

While the number of nonresidential construction workers is increasing, the paper notes that the increase is not enough to replace older, high-skilled workers who are retiring or switching careers. Across the U.S., approximately 20 percent of construction workers are over 55 years old. The paper also posits that a younger cohort of less-skilled workers is contributing to bigger backlogs in projects due to a loss of productivity.

The latest reporting from The Wall Street Journal correlates with news last month from Construction Dive that job openings in February had rebounded significantly following a “statistical aberration” in January.

However, recent analyses from the American Institute of Architects strike a more cautious tone, with the institute’s Architecture Billings Index having recently declined for the fifth consecutive month and a recent survey finding that residential business conditions are slowing.