The final quarter of 2023 saw the U.S. construction sector grapple with the effects of higher interest rates and an uneven economy. Overall starts for nonresidential construction took a 13% tumble compared to the previous quarter. This slowdown is expected to persist at least until the Federal Reserve cuts rates, tentatively forecast for mid-year. With more accessible funding in the latter half of 2024, demand should pick up, leading to modest growth of between 1%-3% for the year. While material prices seem to be stabilizing, certain areas like concrete remain volatile. Labor shortages remain a persistent challenge. Overall, we don’t necessarily see the makings of a recession ahead, but it is anticipated that stagnant growth in the economy at large will limit growth for most construction verticals in 2024.
We examine an aging labor force, construction labor force development efforts and field innovations in this issue’s Current Events.
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In this spotlight, Chris Cole, National Self-Perform Director, discusses the ongoing construction labor force shortage and how self-perform can be a solution to this ongoing issue while simultaneously diversifying the talent pipeline for a career in the industry. Last year, JE Dunn completed almost $600 million in self-perform work and close to 90% of our projects utilized some form of self-perform.
“By taking on self-perform work, the general contractor sources, hires, and trains talented and hard-working individuals who want to pursue construction trades as their career.”
The construction industry is staring down a slow-moving obstacle — a workforce that isn’t getting any younger.
With an aging population and an ever-changing technological landscape, attracting and retaining skilled labor is vital for continued growth and development.
An aging workforce, a tight labor market, and rising demands for safety and productivity are further motivating construction companies to find new areas of innovation.
The construction industry is staring down a slow-moving obstacle — a workforce that isn’t getting any younger. An aging labor force threatens to stall progress, compromise quality, and potentially set the industry’s capacity constraints back decades.
According to the Bureau of Labor Statistics (BLS), the median age of a construction worker in the U.S. in 2022 was 41 years old, slightly lower than the median age of 42 years old among the total U.S. labor force1. However, when you compare the same BLS data from 2011 to 2022, a startling trend is apparent: Construction workers are aging quicker at four times the rate of the total labor force.
This trend isn’t confined to our national borders; other developed nations like Japan and Germany face similar demographic challenges. The baby boomer generation, a once-mighty pillar of the industry, has entered or is approaching retirement age, leaving a vast void in experience and expertise. Several factors contribute to this “silver wave”:
This aging workforce casts a long shadow over the industry’s future. Project delays, ballooning costs, and compromised quality become grim realities that bring many potential problems to light. A lack of skilled labor, such as idling cranes due to a shortage of qualified operators, can lead to projects grinding to a halt, missing deadlines, and escalating budgets. As seasoned workers retire, their specialized knowledge and skills are at risk of being lost forever when it comes to work like intricate bricklaying techniques or specialized welding expertise. And finally, the industry is acknowledging the safety concerns that come with an aging workforce as their physical capabilities may decline. For instance, seasoned laborers might struggle to lift heavy beams while younger apprentices may lack the experience to navigate hazardous environments.
The construction industry stands at a crossroads: Will it crumble under the weight of its aging workforce, or will it find a way to adapt and thrive? The answer lies in a collective effort to recognize the challenge, understand its complexities, emphasize recruitment and retention efforts, and explore innovative solutions. This is not just an industry issue; it’s a societal one, with ramifications for infrastructure development and economic growth.
With an aging population and an ever-changing technological landscape, attracting and retaining skilled labor is vital for continued growth and development. This demands a multifaceted approach to labor force development, encompassing everything from apprenticeship programs to embracing automation and fostering diversity. The industry is facing challenges related to:
To address the evolving needs of the construction industry, a focus on labor force development is crucial. The most common strategies seen are:
Labor force development in the construction industry is not just about filling vacancies; it’s about building a sustainable future for the sector. By investing in people, embracing innovation, and fostering a diverse and inclusive workforce, the construction industry can ensure a steady flow of skilled talent, paving the way for continued growth, development, and the creation of resilient infrastructure for generations to come.
The challenges are significant, but the opportunities are boundless. By prioritizing labor force development and embracing positive change, the construction industry can transform itself from a sector facing a workforce crisis to a dynamic and thriving engine of progress, shaping the cities of tomorrow and leaving a lasting legacy on the world we build. Labor force development is not a one-time solution but an ongoing process requiring continuous adaptation and innovation. By remaining committed to building a skilled and diverse workforce, the construction industry can secure its future and continue to be a vital force in shaping the world around us.
An aging workforce, a tight labor market, and rising demands for safety and productivity are further motivating construction companies to find new areas of innovation. Two of those areas, wearable technology and the internet of things (IoT), have particularly exciting potential. These tools are transforming the worksite, offering solutions to age-old problems, and pushing productivity to new heights.
The field of wearable technology, or wearables, covers things that workers on jobsites physically wear to improve performance, safety, and efficiency.
Beyond individual workers, the IoT connects tools, equipment, and materials into a digital symphony. Sensors embedded in everything from concrete beams to heavy machinery provide real-time data, enabling intelligent decision-making and automation.
These innovations are not just theoretical possibilities; they’re making a real difference on construction sites around the world:
Adopting and embracing these technologies requires more than just investment; it also necessitates a cultural shift within the industry. Construction companies need to embrace training programs and create workplaces that value data-driven insights and technological literacy. Workers, in turn, need to adapt to innovative technology and instruments and view them as collaborative tools, not replacements, for their skills.
The future of construction is powered by the potential of technological innovation. By harnessing these tools, the industry can overcome workforce challenges, boost productivity, and build a safer, more efficient future for workers and projects alike.
