The construction industry is still in hiring mode and likely will be for the next few years, according to projections by an industry group.
Why is this important: It’s not supposed to be like this. Typically, when interest rates rise — or when the economy slows — hiring in the construction industry shrinks.
- The industry is incredibly sensitive to the economic cycle, like Axios’ Courtenay Brown and Neil Irwin recently explained.
- But in a tight labor market, things are… different.
By the numbers: The construction industry needs to attract 546,000 new workers this year – on top of the normal rate of hiring – to meet its projected labor demand, according to projections of the associated builders and contractors on Thursday.
- Even if the economy slows in 2024, the industry will still need to hire 342,000 workers on top of normal hiring to meet demand.
- For his estimates, ABC uses a model which examines the relationship between construction spending growth and construction employment and takes into account inputs such as worker demographics.
A few things are happening here: As construction of single-family homes slows, there are “a growing number of mega-projects” that need labor, ABC chief economist Anirban Basu said in a statement.
- These include chip factories and clean energy facilities.
- Basically, almost one in four construction workers are over 55, Basu says, and there aren’t enough young workers entering the industry to replace them.