The Future of the Construction Industry Looks Bright

by Sandy Griffis, Executive Director, Yavapai County Contractors Association

Two years ago our column addressed the importance of the construction industry and the folks who grind and labor in it daily. Two years ago our column talked about the shortage of industry workers, and today we are still plagued with the same major issue of a labor shortage of epidemic proportions.

Construction is the second largest industry in the United States with more than $1 trillion in total volume, accounting for approximately 8% of the nation’s GDP. It is the industry responsible for constructing the buildings and infrastructure so vital to quality of life.

The future of the construction industry looks bright, and the industry will continue to grow. However, this growth has been and is continuing to shine a beacon of light on the critical workforce challenges so many companies are attempting to tackle to survive.

The largest challenge the industry is facing is the retirement of the baby boomers. These are company owners in the industry with the expertise and good old-fashioned knowledge; this is the generational challenge. It is said by 2030, millennials will make up 75% of the world’s workforce.

In connecting with local millennials, we realize they have a different set of values and ethics than the baby boomers, which is great. Several of our local contractors have experienced this in the hiring process with the interaction of the old hard-core workers and the new generation coming on board. It is tough. Some of the older generation are not tech experienced, they still love their old flip phone and they think an apple is fruit for lunch. The new generation wants modern devices and to have, hold and connect with the latest technology on the job site.

How do we meld productivity, efficiency and quality of work with different generations? The veteran guys will admit they resist new technology, and the new generation will admit they want technologically advanced tools.

The construction industry faces a higher risk of labor shortage than many other occupational sectors, and this dwindling labor pool leads to longer delays in project schedules prompting construction-cost increases due to materials and labor.

The U.S. Bureau of Labor Statistics sees a 13% growth rate in the construction sector through 2024, creating approximately 180,000 jobs in the process. If you add in a conservative replacement rate for retiring baby boomers, you get a final total of approximately 458,000 jobs coming online in the next decade that construction companies need to fill.

Construction companies will need to start thinking outside the box to deal with the labor to strengthen its workforce. Construction companies will need to employ innovative solutions to overcome the shortage of skilled workers they’ll face in the future.

Activity in the industry is on an unwavering rapid incline and will continue to pick up. Our industry remains critical to the job market, especially for workers without college degrees.

The Labor Department expects a sustained rebound in construction hiring. A new report from the Bureau of Labor Statistics predicts the industry will add 1.6 million jobs through 2022, which is a relatively high growth rate among sectors but which still leaves total construction employment below housing-bubble-peak levels.

The construction industry offers terrific opportunities and well-paying jobs. And we have lots of jobs available in Yavapai County. There is and will be a continuing demand for construction industry workers, and there are excellent employment opportunities because the number of job openings will continue to exceed the number of qualified individuals seeking to enter the occupation.

Where would we be without construction?