The High Cost of a Booming Construction Market

January 8 2024

Labor Management, Management, Unions

By Daniel Hogan.

On Jan 5, 2024, the Bureau of Labor Statistics released a report indicating an addition of 17,000 jobs in December 2023, culminating in an annual increase of 197,000 jobs in non-residential construction and specialty trades.

The robust economic outlook for 2024 should be a boon for our industry; larger projects, record-setting investment, and a march toward a prosperous future. However, it also amplifies a warning we have heard time and time again – the construction labor supply is aging, and we are not doing enough to ensure skilled craftspeople can build the future we envision now.

Escalating wage growth paired with a shrinking labor force represent a complex balance for all parties. Robust demand for work and high wages are attractive to potential workers, but if those workers are not willing or able to meet demand in the middle, we may fall short. Increased wages may also drive the cost of construction projects up and up and up – a burden that companies and taxpayers may not be excited to bear.

So where do we go from here? Significant investment in workforce development, including training programs and apprenticeships, to prepare a new generation of construction workers is a step in the right direction. But we still need to fully understand the ‘why’ before we can effectively implement the ‘how’.

The construction and maintenance industry must focus on improving job quality and working conditions to retain existing workers and attract new talent. This includes offering competitive wages, ensuring job security, and providing opportunities for career advancement.

While the construction industry’s job growth is a positive indicator of economic health, it also necessitates we ensure that the demand for skilled labor is met. This isn’t a situation that will be solved by any one group or side of the industry, but involves cooperation from the full tripartite (owners, contractors, and labor) to ensure that a skilled workforce is in place to continue growing our industry and our country.