October 10, 2015
Article by Joseph Natarelli, National Construction Industry Group Leader, and Anirban Basu, Marcum's Chief Construction Economist, "Just How Severe Are Those Construction Labor Shortages?," Featured in Construction Accounting & Taxation
It is clear that the nation's construction industr y would benefit from an accelerated influx of young, talented, and ambitious workers.
Conventional wisdom holds that there are large skill shortages facing the U.S. construction industry now and into the future. Underlying this wisdom is a set of facts and a group of anecdotes.
For instance, during its most recent downturn, the industry lost more than 2 million jobs, which chased many workers into other industries. Although construction's recovery is ongoing, it began after recoveries in many other economic segments, including in distribution, manufacturing, and energy generation. There is a widespread belief that many of the workers dislocated from construction during the downturn are not poised to return to the industry any time soon — with the possible exception of energy, which is now shedding employment due to the recent collapse in commodity prices both domest ically and globally.
Over time, construction has shown itself to be an intensely cyclical industry, and that is not appealing to workers who highly value employment stability. Between July 2006 and July 2010, construction lost 2.2 million jobs. Five years later, only 40 percent of those positions had been recovered. By contrast, the overall economy had recovered all of the jobs lost during the recession (in aggregate numbers) by the spring of 2014.1 In short, other industries have been associated with less worker dislocation and faster recovery, which could induce many to continue searching for opportunities beyond construction segments.