78 Percent of Texas Contractors Report Having Trouble Finding Qualified Craft Workers as Association Calls for Measures to Rebuild Workforce

Houston Tops All Metros in Construction Jobs Added in Past Year; But Shortage of Skilled Workers Nationally Has Raised the Cost of Construction and Delayed Project Schedules, Putting Broader Economic Growth at Risk

Seventy-eight percent of construction firms in Texas report difficulty finding qualified craft workers even as local construction employment set a new high, according to the results of a survey and rankings released today by the Associated General Contractors of America (AGC). Association officials warned that the shortages pose a risk to future economic growth and released a new workforce development plan to address the labor shortages.

“As demand for construction grows, contractors need more trained workers than are currently available,” said Ken Simonson, chief economist for AGC, who released the new data during a visit to a local construction firm’s training programs. “The best way to enable further economic growth, facilitate rebuilding aging infrastructure and get more people into high-paying construction careers is to address industry workforce shortages.”

Simonson noted that the Houston-Woodlands-Sugar Land metro area added 25,500 construction jobs between July 2017 and July 2018, a 12 percent increase. He added that Houston added the most construction jobs of the 358 metro areas the association tracks. The 239,000 people working in the industry locally is an all-time high for construction employment in the area.

The economist said tight labor market conditions are prompting many firms to change the way they operate, recruit and compensate workers. Most firms in Texas, 69 percent, report they have increased pay rates for craft workers because of workforce shortages. Half of the Texas firms report they have begun or increased in-house training and 36 percent of firms statewide have increased overtime to cope with labor shortages.

Simonson noted that many firms are also taking advantage of innovative new technologies to cope with labor shortages. Twenty-six percent of Texas firms are adopting methods like offsite prefabrication, lean construction and building information modeling to make their operations more efficient. An equal share reports they are increasing their use of labor saving-equipment and technology to be able to do more work with fewer people.

Workforce shortages are also having an impact on the costs of construction and how long it takes to build projects. Fifty-two percent of Texas firms report that workforce shortages have prompted them to put higher prices into their bids. And 45 percent report that already-underway projects cost more than first anticipated. At the same time, 44 percent of Texas firms report that labor shortages are causing projects to take longer than originally scheduled and 26 percent report they have put longer completion times into their bids.

The association also released a new Workforce Development Plan that identifies steps federal officials should take to address construction workforce shortages, including doubling the funding for career and technical education over the next five years and allowing more people with construction skills to legally enter the country. The plan also outlines new recruiting steps the association is taking, including launching a new digital advertising campaign and establishing a workforce venture fund.

Over 2,500 construction firms participated in the survey nationwide, which was conducted in June, July and August of this year, including 260 from Texas. Click here to see the national survey results, analysis of the data and the Texas survey results. Click here to see the metro construction employment data.

For more information, contact Brian Turmail at 703-459-0238 or turmailb@agc.org.