The construction industry needs an additional 430,000 professionals this year
In 2021, construction companies will need to hire 430,000 more workers than they employed in 2020, according to an analysis of U.S. Bureau of Labor Statistics data released today by Associated Builders and Contractors. The analysis also revealed that every $1 billion in extra construction spending generates an average of at least 5,700 construction jobs.
According to estimates from economic consulting firm Markstein Advisors, construction spending is likely to reach $1.45 trillion in 2021, up 1.3 percent from 2020. Under this scenario, employment demand increases by 430,000 this year from actual employment of 7,829,000 in 2020. A higher growth rate scenario could boost the number of additional construction workers needed in 2021 to nearly one million.
As of February, seasonally adjusted average hourly earnings in construction were 7.7 percent higher than total private average hourly earnings. For all of 2020, construction average hourly earnings were 7.8 percent higher than total private average hourly earnings.
Other key findings include analysis on construction spending and job creation in 2020. The spread of COVID-19 and efforts to limit its effect on the population had a substantial impact on construction activity and employment. Ironically, in 2020, nominal (not adjusted for inflation) construction spending rose by 4.8 percent even as employment fell by 6.3 percent. These factors contributed to this apparent paradox:
- A spike in building materials and labor costs, which is attributed to shortages and supply chain disruptions.
- A change in the mix of construction work, with an increase in residential construction, a segment that saw some of the largest price increases due to an uptick in lumber prices.
- A reduction in labor supply encouraged builders to adopt more labor-saving technology faster than usual.
- Improvement in the scheduling and logistics of building materials delivery.
- Increased use of prefabrication and modularization.
- A decrease in the number of smaller, less efficient construction companies because they went out of business.
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