Richard Branch of Dodge Construction Network shares his thoughts on the current state of the construction industry workforce.
Transcription
Jack Kopanski: Just taking a look at the at the workforce, I know that’s been sort of a hot-button issue, obviously even further than this year, and this year, it’s just sort of continued. Just finding those skilled workers, and really workers in general, continues to be a struggle for the construction industry. What have the first three quarters of this year brought in terms of that, has it gotten better? Has it gotten worse? And what do you maybe foresee, as far as hiring goes, looking into 2025?
Richard Branch: Yeah, I think you’re spot on. Probably one of the two or three biggest things holding back construction from really expanding, much stronger than it is, is the shortage of of skilled workers. From a hiring perspective, though, we’re averaging about 20,000 new construction jobs each month this year. That’s pretty much on par with where we were in 2023, a little bit slower than where we were in in 2022. So hiring remains pretty robust, clearly showing that the demand for workers remains strong.
Kind of a counter piece of data is also reported by the Bureau of Labor Statistics, and that’s the number of job openings. And the number of job openings in construction has been falling. It’s around 250,000 open jobs down from a peak of around 400,000 open jobs a few months ago. To be honest, I’m not sure if I want to kind of sink into that data too much or put too much stock in that data. It’s pretty volatile. I’ve read some reports that the survey responses that feed that data might be underperforming. Survey response rates might be lower, and it just seems to run counter to just about everything anecdotally that we’re hearing in the sector, right?
So I think the concern that, as I think about it, with hiring, is, if hiring remains robust now and construction starts in 2024 are trundling along. You know, they’re growing slightly. What’s going to happen if and when the Fed shifts policy and it starts to stimulate construction? And the concern there is that that’s when we’ll start to see a real ceiling develop in construction, that there’s only so much work we can get done with the number of workers that we have. So this will continue to be a hindrance for activity over the next several years.
To end maybe on a positive note in this discussion, there’s been lots of reports – there’s a great article, I think was in The Wall Street Journal or the New York Times about a month or so ago about increasing enrollments in trade schools. So that trade off between going to a college or university and going to trade schools. It seems like trade school enrollment is rising. So I think that’s good news down the road. It takes time for those folks to get through their training and then do apprenticeships and whatnot. So maybe this is the start of a new trend that maybe is more like a 2026-2027 thing that we can think about. So good news there maybe down the road, but I think at least over the short term, I think labor will continue to be an issue.
Featured Photo: P&Q Staff
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