March 2, 2021

Construction Labor Market Tightness Persists, Finds Annual Marcum Analysis

JOLTS
Construction

The 2020 Marcum JOLTS Analysis of construction employment trends reports that the industry is beginning to experience labor market tightness as it begins to recover from the recession caused by COVID-19. Job openings fell to 195,000 in December, equal to roughly 2.6% of the available construction positions. The annual Marcum report, which was released today by the Firm’s national Construction Services group, extrapolates construction data from the U.S. Bureau of Labor Statistics’ Job Openings and Turnover Survey.

“When the pandemic began, some thought (and hoped) that the massive job losses observed in March and April would mitigate the skilled labor shortages that have frustrated construction firms for years,” wrote Anirban Basu, author of the report and Marcum’s chief construction economist. “That simply hasn’t happened to any meaningful degree.”

Dr. Basu points out that contractors have shown a reluctance to lose workers in an increasingly tight labor market. “In December 2020, there were 13,000 more workers who quit their construction jobs than were laid off or discharged by their employers. This was just the 17th month in the past 20 years during which quits exceeded layoffs and discharges—a clear indication of labor market tightness.”

Contractors in some regions of the country are struggling to find labor, and that has driven up wages. “In the midst of a gut-wrenching, economy-destroying pandemic, average hourly earnings of construction employees reached their highest level on record in January 2021 ($32.11), and average weekly hours worked rose to their highest level since 2019’s third quarter. This is what might be expected from a strong economy operating under normal circumstances, not one facing a lingering pandemic and elevated unemployment.”

The report warns that, historically, some workers who lose their jobs during a recession don’t return to the industry. “According to the Census Bureau, more than 60 percent of construction workers who lost their jobs during the Great Recession left the industry permanently by 2013. Many of these workers found positions in other industries, while others retired altogether.”

Marcum Construction Group

One of the leading construction accounting firms in the U.S., Marcum LLP’s Construction Services Group provides audit, consulting, and taxation services to clients ranging from start-ups to multi-billion-dollar enterprises. The group’s professionals are among the country’s foremost experts in construction accounting. Frequent industry authors and speakers, they also serve as technical reviewers for the AICPA’s construction audit and taxation guides. Marcum’s construction group publishes several definitive industry resources – including the annual Marcum National Construction Survey, the quarterly Marcum Commercial Construction Index, the Marcum PAS Contractor Compensation Quarterly, and the annual Marcum JOLTS Analysis of construction employment trends – and presents a robust curriculum of industry summits and technical webinars focused on the unique needs of construction contractors.

About Marcum LLP
Marcum LLP is a top-ranked national accounting and advisory services firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum offers industry-focused practices with specialized expertise to privately held and publicly registered companies, and nonprofit and social sector organizations. Through the Marcum Group, the Firm also provides a full complement of technology, wealth management, executive search and staffing, and strategic marketing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. Marcum is committed to the advancement of diversity, equity and inclusion. The Firm is a founding member of LEA Global and is the exclusive U.S partner firm of ECOVIS International. Ever wonder where the people with all the answers get all the answers?  #AskMarcum

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Construction