Construction booming, but workers needed

U.S. construction nationally is experiencing somewhat of a boom, shown in several months of growth. However, more workers are needed to meet the demand, according to new research.

The three most recent surveys by the Census Bureau show not only about $2 trillion of total monthly activity, but month-to-month growth each month, from 0.2% to 0.9%. Even with residential housing starts dropping 14% from December to January – mostly due to inclement weather and contractor reluctance to build on speculation with the Federal Reserve not lowering interest rates affecting mortgages – the construction industry is robust from coast to coast.

And in west-central Illinois.

“I know home builders have commented that builders haven't been building due to material costs and uncertainty in building spec houses,” comments Jimmy Dillon, Associate Director of the West Central Building & Construction Trades Council. But “the numbers provided by the U.S. Census Bureau are probably very similar around here.”

Overall nationwide residential construction showed improvements from last year in November (+3.7%), December (+6.8%) and January (+5.2%). See chart below.

Nevertheless, growth could be even better since activity is slowed by a lagging labor force.

“If there are fewer workers available, construction takes longer,” said Lily Roberts, managing director for inclusive growth at the Center for American Progress, a Washington, D.C., think tank.

The country needs about 7 million more homes to house everyone who needs shelter. But to build all those homes, experts say, America would need many more construction workers.

However, construction’s work force has been adversely affected by a series of factors: Some 30% of construction’s labor force was lost in the Great Recession of 2008, report economists from the University of Wisconsin-Madison and the University of Utah; other losses came during the COVID pandemic (generally from late 2019 through early 2022), and a slew of retirements, recorded by the National Center for Construction Education and Research, which noticed that about one-fifth of construction workers are 55 years old or older.

Also, a crackdown on immigration dating to the Obama administration has contributed to the shortfall of workers, the university economists say, and about two-thirds of construction companies report many job applicants just don’t have the necessary skills.

Some states, including Illinois, are responding by funding apprenticeships, investing in community college programs and offering grants to help certain industries, all hoping to build a stream of skilled construction workers, according to Robbie Sequeira of Stateline news.

In metro Peoria, “local schools have put a new effort towards Career technical Education programs instead of just trying to send kids to college,” Dillon says. “Dr. Sheila Quirk Bailey at Illinois Central College has spoken a lot about the need for credentials, [and] the trades have been spending a lot of time and effort recruiting at schools.

“Some training schools have had less people applying than they have had in years past,” he continues. “There are also a lot of employers offering good middle-class jobs out there – all competing for the same workers.”

Quirk Bailey, ICC’s President, this winter introduced an Advanced Placement: AP Workforce initiative in cooperation with Illini Bluffs High School, Pekin Community High School, Peoria Public Schools, the Peoria Regional Office of Education, SkillsUSA Illinois, the West Central Illinois Building and Construction Trades Council and Illinois Central College, all to centralize work-based learning experiences for high school students to address workforce shortages and provide students with pathways to good jobs post-graduation.

“The consortium’s AP Workforce initiative will result in a regional work-based system designed to improve college and industry credential attainment, employment rates, and earnings through a centralized hub that will scale equity-driven work-based learning and apprenticeships throughout the Central Illinois region,” said Quick Bailey. “Industries of focus include health care, construction, HVAC, industrial maintenance/manufacturing, and information technology. 

“The Advanced Placement: AP Workforce initiative will be a game changer for this region,” she continued. “Instead of an increasing number of our high school graduates pursuing no options post high school to secure their future, the AP Workforce initiative will ensure these students gain work-based experiences and college credit, graduate and transition to apprenticeships that ensure their futures.”

 

Construction grew over last few months

Growth from previous month

                                     November                  December                   January

Total                             $2 trillion (+0.4%)       $2 trillion (+0.9%)        $2.1 trillion (+0.2%)

Private                         $1.5 trillion (+0.7%)     $1.6 trillion (+0.7%)     $1.6 trillion (+0.1%)

Public                           $455 billion (+0.7%)    $476 billion (+1.3%)    $479 billion (+0.9%)

 

Percentage growth from last year by project type

                                       November                  December                   January

Residential                     +3.7%                         +6.8%                        +5.2%

Religious                        +31.1%                       +31.3%                      +23.5%

Highway/street                +15.3%                     +25.9%                       +22.2%

Manufacturing                +59.1%                      +0.5%                         +36.6%

 Source: U.S. Census’ “Value of Construction Put in Place Survey,” seasonally adjusted annual rates