Skilled Labor Shortage Continues to Challenge Industry Despite Economic Gains
MARCH 13, 2024 (New York, NY) – Despite economic improvements in some dimensions in 2023, the construction industry continues to face a severe skilled labor shortage, according to Marcum LLP’s annual analysis of the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS).
Marcum’s National Construction Services Group produces the analysis.
A surprisingly strong economy supported robust construction industry hiring in 2023. “Contractors have now added jobs in each of the past ten months, and only once in the past two years—in March 2023—has industry employment declined during a month,” said Anirban Basu, Marcum’s Chief Construction Economist and author of the report. “Despite still being about 500,000 jobs short of where employment would have been based on the pre-pandemic trend, the pace of industry job growth has returned to the late 2010s level.”
This hiring would have occurred faster if not for ongoing skilled labor shortages. “An average of 4.6% of construction positions were unfilled over the course of 2023,” said Basu. “That’s the second highest level ever, trailing only the 4.9% average seen throughout 2022.”
While labor supply imbalances have improved in other industries, the continuing impact on the construction industry has driven up labor costs. “Since the start of 2022, average hourly earnings for construction workers have risen at a faster rate than wages across all industries, and that dynamic should persist in 2024 as elevated demand for construction services, especially in certain areas and segments, bolsters the demand for labor,” said Basu.
Joseph Natarelli, Marcum’s National Construction Leader, shared his cautiously optimistic perspective on the future: “The demographic trends at the heart of labor shortages over the years are likely to continue. With Baby Boomers edging towards retirement and immigration offering limited relief, our industry must navigate these headwinds with innovative hiring strategies and a firm grasp on market forecasts.”
About Marcum Construction Services
Marcum LLP is one of the leading construction accounting firms in the U.S., providing audit, consulting, and taxation services to clients ranging from start-ups to multi-billion-dollar enterprises. Among the country’s foremost experts in construction accounting, Marcum’s construction professionals are frequent industry authors and speakers and serve as technical reviewers for the AICPA’s construction audit and taxation guides. Marcum’s construction group also publishes several definitive industry surveys and presents an ongoing series 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 firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum’s industry-focused practices offer deep insight and specialized services to privately held and publicly registered companies, and nonprofit and social sector organizations. The Firm also provides a full complement of technology, wealth management, and executive search and staffing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. #AskMarcum.
