Construction Job Openings Up 40% for Year, Contractors Turning Down Work

Construction job openings are up 40% from this time last year, according to the Associated General Contractors of America. Job openings in construction at the end of April totaled 494,000.

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You can only do so much with so little and that's what construction contractors have been finding on the jobsite, according to an analysis published by the Associated General Contractors of America (AGC). Construction contractors are taking on less work because they don't have enough employees to fill open positions, the report said. 

“Nonresidential construction spending is being held back by a paucity of qualified workers, not a lack of projects,” said Ken Simonson, the association’s chief economist. “With job openings at an all-time high and the industry’s unemployment rate at the lowest ever for April, finding workers is contractors’ top concern.”

It's the second month in a row that construction spending has declined, according to AGC's analysis of federal spending data. 

According to AGC, construction spending, not adjusted for inflation, totaled $1.74 trillion at a seasonally adjusted annual rate in April, 0.2% above the upwardly revised March rate and 12.3% higher than in April 2021. Monthly gains, however, were limited to private residential construction spending, which increased 0.9% for the month and 18.4% from April 2021.

In contrast, private nonresidential construction spending dipped 0.2% from March, although the April total was 10.1% higher than in April 2021. Public construction spending slid 0.7% for the month but increased 1.8% from the year-ago level.

Construction industry job openings have increased dramatically in the past year. Job openings in construction at the end of April totaled 494,000, a 40% increase from April 2021 and the highest total for any month in the series, dating back to December 2000.

Openings exceeded the 455,000 workers hired during the month, suggesting that contractors would have hired twice as many workers as they were able to find, Simonson noted. A major reason unfilled positions were at an all-time high was that the unemployment rate for jobseekers with construction experience set a record low for April of 4.6%, he said.

The downturn in nonresidential construction spending was widespread. The largest segment, power—electric, oil, and gas projects—slipped 1.5% in April. Highway and street construction edged down 0.2%. Spending on commercial construction—warehouse, retail, and farm projects—and on education structures each declined 0.4%. Among the five largest segments, only manufacturing construction increased, by 1.7%, propelled by a variety of factory projects.

The decline is so dramatic it's got some associations sounding alarm bells. Some association officials said workforce shortages are now so severe they are undermining construction activity. They are urging public officials to boost funding and support for construction education and training programs for students and adult workers. They also called on Congress and the Biden administration to work together to allow more workers with construction skills to legally enter the country in the short-term.

“We are ready to work with public leaders to undertake the long-term work of rebuilding the domestic pipeline for recruiting and preparing a new generation of construction professionals,” said Stephen E. Sandherr, the association’s CEO. “But without short-term relief measures, like allowing more workers to legally enter the country, the economy will continue to suffer because we lack the people power to keep pace with demand for construction.”