CONSTRUCTION LABOR SHORTAGES PERSIST, REPORTS ANNUAL MARCUM JOBS ANALYSIS

NEW YORK, March 14, 2023 /PRNewswire/ -- The construction industry continues to face a skilled labor shortage, with worker scarcity worsening since the beginning of the pandemic, according to Marcum LLP's annual analysis of the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS).

The Marcum JOLTS Analysis is produced by Marcum's National Construction Services group.

Slow Going Post-pandemic

The construction industry has slowly begun to recover jobs lost in the early months of 2020. "In the first two months of the pandemic, construction lost about 1.1 million jobs, a decline equivalent to 14.2% of the industry's workforce," said Dr. Anirban Basu, Marcum's chief construction economist and author of the report. "As of January 2023, the most recently available data as of this writing, there are roughly 7.9 million people on construction payrolls. That's about 3.6% more employees than the industry had at the start of the pandemic."

But the rate of recovery has put the industry significantly behind the pre-pandemic pace of employment growth. "That's approximately 400,000 fewer construction employees than there would have been, based on the 2015 to 2020 pace of hiring, had the pandemic not occurred," said Dr. Basu.

The residential sector, buoyed by a boom in new home construction, has gained employees at a faster pace than the nonresidential sector over the past two years. "Residential construction accounted for 39.0% of all construction workers at the start of the pandemic," said Dr. Basu. "As of January 2023, that share had risen to 41.4%."

Nonresidential construction has recovered jobs at a slower pace due to behavioral changes such as the increased prevalence of remote work and e-commerce. "The nonresidential industry has fared less well, and that's reflected in the segment's workforce, which is currently 0.5% smaller than at the start of the pandemic," said Dr. Basu.

Open Positions Going Unfilled

The pace of hiring would occur at a more rapid pace if not for ongoing construction labor shortages. "The construction industry averaged 390,500 open, unfilled positions in 2022, by far the highest recorded level over the 21-year period for which the Bureau of Labor Statistics has data," said Dr. Basu. "As of January 2023, one in twenty (5.0%) of construction jobs were unfilled."

While the construction industry has grappled with labor shortages since long before the pandemic, worker scarcity now affects a majority of economic segments. "In February 2020, there were 7.1 million open, unfilled jobs across the entire economy, close to the all-time high set in November 2019," said Dr. Basu. "By March 2022, job openings had spiked to a new record of 11.9 million."

The surplus of open positions has empowered workers to switch jobs, or even industries, in search of higher pay. "The construction industry quit rate, or the share of construction workers who quit their jobs, averaged 2.5% during 2021 and 2022," said Dr. Basu. "Over the previous decade, the construction industry quit rate averaged just 1.8%."

Dr. Basu warns that given the predictions of recession toward the end of 2023 and the elevated price of construction materials, the industry must take steps to buoy its workforce. "The gloomy economic outlook for the second half of 2023 and beyond and elevated borrowing costs could have dire effects on construction activity. The upshot is the construction industry must take drastic steps to ensure that the workforce is sufficiently sized to meet the demand for labor."

Marcum's national construction leader, Joseph Natarelli, said, "Warning signs and historical trends of downturn are out there and have been for a little while. The construction industry, always the first to feel the pinch and last to be relieved of it, saw some minor downturns this June. Jobs are plenty, unemployment is slow still, but nonresidential spending hasn't grown over the past year and that includes the increases we saw in governmental and infrastructure spending. For now, we are advising our clients to take a skeptical and informed eye to the future."

To download the full Marcum construction jobs analysis and for more information, visit www.marcumllp.com.

Marcum Construction Services

Marcum LLP is one of the leading construction accounting firms in the U.S., providing audit, consulting, and taxation services to clients ranging from start-ups to multi-billion-dollar enterprises. Among the country's foremost experts in construction accounting, Marcum's construction professionals are frequent industry authors and speakers and serve as technical reviewers for the AICPA's construction audit and taxation guides. Marcum's construction group also publishes several definitive industry studies and presents an ongoing series of industry summits and technical webinars focused on the unique needs of construction contractors.

About Marcum

Marcum LLP is a top-ranked national accounting and advisory firm dedicated to helping entrepreneurial, middle-market companies and high net worth individuals achieve their goals. Marcum's industry-focused practices offer deep insight and specialized services to privately held and publicly registered companies, and nonprofit and social sector organizations. Through the Marcum Group, the Firm also provides a full complement of technology, wealth management, and executive search and staffing services. Headquartered in New York City, Marcum has offices in major business markets across the U.S. and select international locations. #AskMarcum. Visit www.marcumllp.com for more information about how Marcum can help.

SOURCE Marcum LLP