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The Construction Industry’s Labor Shortage — and What Manufacturers Should Do About It

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It’s been 10 years, but the construction sector is still talking about the Great Recession. These days, while strength in the construction sector obviously has returned, its workforce is struggling to keep up with demand.

With many skilled construction workers leaving the industry in the wake of the 2007 financial crisis, the ranks of workers that replaced them have been challenged to fill their shoes.

Recent industry statistics bear this out: A 2017 McKinsey report says that construction industry labor-productivity growth, on a global scale, has trailed the rate for the overall economy over the last two decades.

It’s not that the construction industry isn’t hiring: unemployment in the construction sector, as recorded by the U.S. Bureau of Labor Statistics, fell to 4.5% in June 2017, a low point rarely seen since the summer of 2000. Even so, the number of unfilled construction jobs has been trending upward since 2009.

General contractors confirm they are facing a worker shortage: In a new survey from the Association of General Contractors some 75% of construction companies said they were having a difficult time filling some hourly trade positions, like bricklayers, carpenters, roofers, and electricians.

These findings are noted even after years of wage increases in the industry: The average hourly wage for construction work has risen steadily since 2007, from a level of $22.98 per hour to $28.69 in May 2017, according to Labor Bureau statistics.

What Manufacturers Can Do To Help

Besides the regular wage increases, there have been a few initiatives put in place to help ease the worker shortage the industry is experiencing, such as the NAHB’s Workforce Development initiative.

Even so, the labor shortage is expected to persist for some time: Another report from the Labor Bureau predicts that the number of workers in the construction industry will grow at a snail’s pace for several years: just 1.2% per year through 2024.

Fortunately, the labor shortage cloud does have a silver lining: While the construction industry is plagued with labor issues, manufacturers and other industry stakeholders can use the situation as an opportunity to make a welcomed difference.

On that note, we offer three marketing outreach ideas we believe can help ease the labor burden in construction, while also helping manufacturers to build new competitive advantages.

  1. Current demographics. A promising start for manufacturers is to address disparities evident in the construction industry’s current workforce. With the Great Recession producing what some have called a “mass exodus” from construction, it’s a good time to take stock in who is comprising the industry today — and who isn’t.
    A 2017 Brookings Institution report indicates that around 20% of those employed in the construction industry in 2015 were low skilled immigrants, with 12 years of education or less.Considering that today’s construction workers may be less experienced than their Pre-Recession counterparts, it’s likely a significant number of construction industry workers could benefit from additional training.
  2. Vocational and Training Support. Similarly, manufacturers and other entities may be able to restore trust in the industry by sponsoring vocational training or information sessions about the industry. Vocational training may help to recruit new workers to the industry by knocking down some of the barriers to entry.
  3. Product Innovation. Finally, product innovation is another tool manufacturers can and should use to help ease the construction industry labor shortage. Building products engineered to be easier to handle and install could go a long way to reducing work complexity and the number of construction workers required.

We’ll be sharing detailed insights on how building products manufacturers can respond to the industry’s labor shortage in future blog posts. Please contact us if we can help you create a customized plan to engineer demand.

Topics: Building Products Manufacturing