US needs 500K construction workers

Untitled Untitled

The construction industry is still in hiring mode and likely will be for the next few years, according to an industry group’s projection.

Why it matters: It’s not supposed to be like this. Typically, when interest rates rise — or when the economy slows down — construction hiring contracts.

  • The industry is incredibly sensitive to the business cycle, as Axios’ Courtenay Brown and Neil Irwin recently explained.
  • But in a tight labor market, things are … different.

By the numbers: The construction industry needs to attract 546,000 new workers this year — on top of the normal pace of hiring — to meet its expected demand for labor, according to projections from the Associated Builders and Contractors out Thursday.

  • Even if the economy slows down in 2024, the industry will still need to hire 342,000 workers on top of normal hiring to meet demand.
  • For its estimates, ABC uses a model that looks at the relationship between construction spending growth and construction employment and considers inputs like worker demographics.

A few things are happening here: While single-family home construction is slowing, there are “a growing number of mega-projects,” that need workers, ABC chief economist Anirban Basu says in a statement.

  • These include chip-making plants and clean energy facilities.
  • Crucially, nearly 1 in 4 construction workers are older than 55, Basu says, and not enough younger workers are coming into the industry to replace them.