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The construction industry is reporting good news about the worker shortage. The Associated Builders and Contractors group says there\u2019s been a surge of workers returning to the industry, and the workforce size is almost what it was at the start of the pandemic. But even with that progress, the workforce gap is still an issue. (1)

Hi, I'm Kathy Fettke and this is Real Estate News for Investors. If you like our podcast, please subscribe and leave us a review.

The Labor Department says the industry added 60,000 jobs last month, in February. Nonresidential construction added about 29,000 of those jobs for an annual increase of 3.9%. Residential construction added about 31,000 jobs for an annual increase of 4.5%.

That brings the total number of construction workers to 7.6 million but the industry still has many positions to fill. The unemployment rate for the construction industry is currently at 6.7%. That\u2019s almost twice the rate of unemployment for the population in general, which is running at 3.8%.

State Data on Construction Jobs

If you break the data down into states, the Associated General Contractors of America says that construction employment is \u2018higher\u201d than pre-pandemic levels in 29 states and \u201clower\u201d in 21 states, plus Washington, D.C. According to that organization, some states are still reporting record low employment numbers for the construction industry. (2)

The association\u2019s chief economist, Ken Simonson, says: \u201cThe scramble for workers is likely to drive wages and overtime costs even higher at the same time rising materials prices are cutting into already tight margins.\u201d

Although the worker shortage continues, the February numbers are a good sign. ABC\u2019s chief economist Anirban Basu says: \u201cBottom line: The U.S. economy is charging into the post-pandemic world with significant momentum, and nonresidential construction is part of that story.\u201d He says there\u2019s evidence that \u201ccontractors have had a somewhat easier time filling available positions recently\u201d and that \u201csupply chain issues have improved slightly.\u201d

National Construction Workforce Gap

Again, that kind of scenario will vary from state to state. And there is still a dire need for construction workers across the U.S. ABC estimates that the industry needs another 650,000 workers to help the industry catch up with housing market demand. But Basu believes that 2022 will be a strong year.

Of course the impact of the Russian invasion of Ukraine is a big variable. That is pushing prices higher for some things, like gas, and causing new supply chain issues. Basu also points out that the government won\u2019t be spending as much money this year, despite plans for infrastructure upgrades.

AGC of America CEO Stephen Sandherr says that construction firms will have to pass along additional costs and that developers \u201cshould not be punished for failing to foresee a Russian invasion, spiking oil prices and soaring inflation when preparing public works bids.\u201d

Rapid Workforce Growth

So there are still headwinds from various directions but there are also signs of optimism. Basu says: \u201cAt the heart of America\u2019s economic momentum is rapid workforce growth, with more people re-entering the workforce to take advantage of higher wages and to better contend with rapidly rising prices.\u201d

If you\u2019d like to read more on this topic, you\u2019ll find links in the show notes at newsforinvestors.com

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Thanks for listening. I'm Kathy Fettke.

Links:

1 - https://www.abc.org/News-Media/News-Releases/entryid/19274/construction-employment-surges-in-february-to-near-pre-pandemic-levels-says-abc

2 - https://www.agc.org/news/2022/03/14/construction-employment-remains-below-pre-pandemic-levels-21-states-and-dc-spiking-materials-price