The Great Labor Shortage

In November of last year, America’s construction industry hit a peak of $1 trillion in new projects. In 2017, the U.S. added approximately 210,000 new construction jobs.

Those are promising statistics, aren’t they?

If you want to take a quick read on the pulse of the economy in general, the building industry is a good place to look. New projects and new jobs generally mean a healthy economy. The construction industry itself, however, is in crisis.

As new construction projects increase, so does the demand for workers. Despite the demand, the industry is experiencing a labor shortage country-wide. Disaster-struck areas, such as Texas and Florida which were battered by hurricanes last year, or California which has been plagued by wild fires, are struggling to find skilled workers and feeling the financial strain as a result.

As baby boomers edge closer to retirement and immigration crackdowns continue, companies scramble to train and replace their workforce – or face a 20+ year skill gap. The less skilled laborers are, the longer it will take to complete a job; a cost issue contractors are coming to know all too well.

Housing construction may be feeling the brunt of the labor shortage, though. More than 1.5 million residential construction workers left the industry during the recession, and less than half of them have returned. Despite an increase in residential projects, homebuilders continue to struggle to staff projects, even though hiring and wages are up for construction workers.

Modular construction is one solution to the time and cost challenges the industry faces in response to the labor shortage. Single family homes and multifamily residences, dormitories and hotels, even commercial buildings, can be built in factories and shipped to the job site. Modular construction takes significantly less time to complete than traditional construction, and because the factory production doesn’t require the same level of skilled labor as construction trades do, modular construction isn’t facing the same labor issues. In fact, offsite construction is one of Construction Dive’s “8 Construction Trends to Watch in 2018.