Report: Workforce shortages reach pre-pandemic levels

An annual survey of more than 2,100 contracting firms done between late July and early August by the Associated General Contractors of America (AGC) and Autodesk, a design and software company, highlighted how the pandemic created constraints on the demand for construction work and the number of workers available.

The survey showed that 89 percent of contractors are struggling to find craft workers, and 88 percent are experiencing project delays.

Similarly, 93 percent of firms are being affected by rising materials prices. These and other survey results reinforce the impact COVID-19 continues to have on the demand for work and the number of workers available for hire.

“Market conditions are nowhere near as robust as they were prior to the onset of the pandemic,” says Ken Simonson, AGC’s chief economist. “At the same time, the pandemic and political responses to it are limiting the size of the workforce, leading to labor shortages that are as severe as they were in 2019 when demand for construction was more robust.”

Other insights

Among the 88 percent of construction firms experiencing project delays, 75 percent cite longer lead times or material shortages as the reason for those, while 57 percent cite delivery delays as the reason.

Workforce shortages are causing project delays for 61 percent of firms, with 30 percent citing lack of approvals or inspectors or an owner’s directive to halt or redesign a project, AGC says.

Rising material costs are undermining firms’ ability to profit from the work they have, with 37 percent reporting they have been unsuccessful in passing those added costs on to project owners, AGC adds.

These supply chain issues contributed to more than half of the firms surveyed reporting projects being canceled, postponed or scaled back due to increasing costs. Twenty-six percent say their projects were delayed or canceled because of lengthening or uncertain completion times, and 22 percent say changing market conditions led to project delays or cancellations.

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