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.