Specialty Contractors Most Troubling Category for Construction Hiring

Specialty contractor labor shortages – namely, in mechanical, electrical, plumbing, steel and concrete – are debilitating more than 90% of commercial real estate construction projects today, according to new research from the Dodge Construction Network’s 2022 Top Business Issues for Specialty Contractors Report.

The research, done in partnership with Procore Technologies, a global provider of construction management software, showed that projects have been negatively affected by a shortage of skilled labor.

Furthermore, experts anticipate the current shortage to become worse as on average, 33 percent of the current workforce is likely to retire in the next five years.

Supply chain disruptions also continue to plague the industry. About one-third of specialty contractors (31 percent) “cannot pass materials cost increases on to owners on half or more of their projects,” according to the report.

Steel Contractors Most Negatively Impacted

Steel contractors (43 percent) were most negatively impacted among the group. Specialty contractors identify poor resource management (ie: labor, materials, equipment) and poor client communication as top drivers of rework.

Additionally, unbillable change orders represent major lost revenue, especially for larger companies. On average, 30 percent of project revenue is lost because of unbilled and unpaid change orders, according to survey respondents.

On average, specialty contractors report that “20 percent of workers’ time is currently spent on low-productivity tasks, such as tracking down information or documenting information on paper,” Dodge Construction Network said.

Construction Employment Growing, but Industry Wishes By Even More

Doug Ressler, business intelligence, Yardi’s CommercialEdge, tells GlobeSt.com that construction employment increased in nearly two-thirds of U.S. metros in 2021, yet growth was limited by the shortage of labor, according to the Associated General Contractors of America.

Construction employment rose in 231, or 65%, of 358 metro areas in 2021. The Houston metro added the most construction jobs (8,800 jobs, up 4%), followed by Chicago (6,500 jobs, up 5%) and Los Angeles (6,300 jobs, up 4%).

Long Island, N.Y., lost the most jobs (-5,700, or -7%), followed by New York City (-4,200 jobs, or -3%) and Baltimore (-3,800 jobs, or -5%).

Twenty-six states remain below the pre-pandemic construction employment levels of February 2020, with losers led by New York, Texas, and California.

“Construction employment topped year-earlier levels in almost two-thirds of metros for the past few months but contractors in many areas say they would have hired even more workers if qualified candidates were available,” Ressler said.