A year on from the initial pandemic outbreak, the U.S. construction labor market has remained relatively solid over this period, ending the year down by approximately 250,000 persons employed.
At first look, this trend shows that the labor market is right-sizing to suit the drop-in construction activity, but these figures do not tell the whole story. Initial studies have indicated that those numbers are being materially affected by the loss of skilled workers who have chosen to retire, which has put added pressure on that skilled workforce. Labor markets are still under pressure and although the drop-in construction activity has offered a respite, we are expecting that this is temporary. If activity returns as expected towards the end of the year, we are going to see further exacerbation of labor shortages and subsequent increases in the cost of work. Already, we have seen indications of projects starting to move forward to get ahead of this curve and that is expected to pick up pace the further we travel into the year. Unemployment is currently at 6.2%, below the running national average, and is expected to continue that trend through the second quarter of this year. As we look further at the details of the labor market, there continue to be difficulties in hiring across multiple trades, most notably within the mechanical, electrical, and plumbing trades, with the majority of our offices confirming these reports.