As we head into a new year, we must first take a pulse of where we have been so we hopefully can identify where we are going. This will be key for the construction industry, as we ramp up the anticipated work in the year ahead. So, let’s take a moment to assess exactly what is happening. Construction is adding work—and jobs—but contractors are still struggling to fill all the open jobs. Seems a bit screwy right?
The most recent numbers are very revealing. Work is rising. Construction employment rose in 238—or 66%—of 358 metro areas between October 2023 and October 2024. Meanwhile construction employment declined in 73 metro areas and was unchanged in 47 metro areas. Again, makes you wonder why we cannot get this moving forward.
The AGC (Associated General Contractors of America) suggests companies are continuing to boost pay rates at record rates, but as this is happening, companies are struggling to find enough qualified workers. This is where the rubber meets the road. We are seeing a double-edged sword.
The pay rate increases are rather substantial in the construction industry. We see the average hourly earnings for October for production and nonsupervisory employees averaged $36.23 per hour in the construction industry. This is nearly 19% above the $30.48 hourly average for production workers in the overall private sector.
The largest percentage gain—20%—occurred in Kahului-Wailuku-Lahaina, Hawaii, which added 900 jobs. Some of the metro areas with significant jobs added in the construction industry between October 2023 and October 2024 include:
- Houston-The Woodlands-Sugar Land, Texas
- Northern Virginia
- Las Vegas-Henderson-Paradise, Nev.
- Miami-Miami Beach-Kendall, Fla.
- Atlanta-Sandy Springs-Roswell, Ga.
The largest percentage decrease occurred in Duluth, Minn.-Wis., with 1,100 jobs lost. Some of the metro areas with the biggest job losses in the construction industry between October 2023 and October 2024 include:
- New York City
- Portland-Vancouver-Hillsboro, Ore.-Wash.
- Sacramento-Roseville-Arden-Arcade, Calif.
- San Francisco-Redwood City-South San Francisco, Calif.
- Riverside-San Bernardino-Ontario, Calif.
The dichotomy here is interesting. We see two-thirds of metro areas added construction jobs from October 2023 to October 2024. Yet, even with all this in mind, 94% of contractors are still having a challenging time finding skilled workers. Pay rates are rising rapidly in this industry—yet it still isn’t enough to fill in the gaps.
It’s more than pay. It’s about reskilling, job training, education, career paths, flexibility, mentoring, and much more. I have talked about these issues many times before. Construction firms need to be more open to listening to future-of-work employees and recognizing we need to start filling the pipeline much sooner. We need to follow them through school and stay with them. It is not about inspiring them and then forgetting them. We need to continue to mentor them all the way until they land that job and encourage them until they see the career path they so desire, so they do not just jump ship. We are seriously falling short of meeting their expectations and helping industry overall meet much-needed requirements right now.
We need to spend the money on this educational process, consulting, mentoring, and finding the best workers for the right positions. We need to stop talking about the problem and invest in our individual efforts and instead invest as an industry to solve this problem before it truly becomes epidemic proportions beyond the two million worker shortages that manufacturing is experiencing.
We must also consider the role technology will play in all of this. I genuinely believe technology will both attract and reduce the number of workers in construction. But the fact remains we must consider the impact technology will have on the industry as whole. It can help fill some of the gaps and it can help attract young workers to jobs in the construction industry. In time, it will reduce the workforce, but it will help to advance the skills of workers to focus their efforts on more important tasks as we have previously discussed. What are your thoughts? What else needs to be done?
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