New report finds construction contractors struggling to find workers and building materials

The U.S. Chamber of Commerce’s Commercial Construction Index (CCI) for the second quarter of 2021, released today, found that commercial construction contractors are gradually becoming more optimistic.

This quarter, the ICC increased by three points to 65. The three main indicators of the ICC (revenue expectations, confidence in new business opportunities and the level of order backlog) all improved this term to achieve scores of 61, 62 and 72, respectively.

However, the overall score (65) is still well below the pre-pandemic results – in Q1 2020 the CCI score was 74, which at the time was in the middle of scores since the CCI started in 2017 .

The optimistic sentiments of contractors this quarter seem to reflect the steady recovery of the overall economy, but the commercial construction industry is also facing unique, perhaps unprecedented, hurdles.

A closer look at this quarter’s data reveals lingering concerns about the availability of skilled workers and shortages of building materials.

Entrepreneurs are struggling to find workers.
Amid a deepening labor crisis, finding skilled labor continues to be a challenge for entrepreneurs. This quarter, 88% of entrepreneurs report having moderate to high difficulty finding skilled workers. Of these, almost half (45%) report a high level of difficulty.

This shortage is causing real setbacks for entrepreneurs:

  • 68% of contractors say they are asking skilled workers to do more work.

  • 56% say they struggle to meet project schedule requirements.

  • Half (50%) of contractors bid higher.

  • More than a third (35%) of contractors say they refuse work because of a shortage of skilled labour.

Although finding skilled workers has been a challenge for contractors in the commercial construction industry since before the pandemic, this quarter coincides with a worsening labor shortage in many industries.

Other recent data and analysis from the US Chamber found that more than 90% of industry association economists say employers in their sectors are struggling to find qualified workers for open jobs.

In sectors as diverse as agriculture and construction, healthcare and hospitality, manufacturing and computer software, 76% of respondents said that companies in their sectors find it “difficult” ( 52%) or “very difficult” (24%) to hire workers. at present.

When asked how companies in their industry are managing to find workers today compared to five years ago, the results showed that hiring is becoming more difficult. An overwhelming 83% of respondents said it was “more difficult” or “significantly more difficult” to hire.

The United States Chamber of Commerce and the United States Chamber of Commerce Foundation recently launched America Works, a national initiative mobilizing industry and government to quickly address the growing labor shortage crisis. work in the United States. Additional research and analysis and workforce solutions for employers are available at uschamber.com/work.

Wood shortages are increasing.
Another ongoing challenge for commercial construction contractors is the shortage of materials. This quarter, nearly half (46%) of contractors say less availability of building products has been a top concern lately, compared to 33% who said the same last quarter.

Lumber has seen higher demand due to a boom in residential construction since the start of the pandemic. The shortage has spread to commercial construction, and this quarter the impact of the lumber shortage has continued to worsen.

About a third (33%) of contractors report experiencing a shortage of wood/lumber, up from 22% in Q1 2021. This is also up from Q4 2020, when 31% reported experiencing a shortage of lumber. By comparison, only 5% of contractors surveyed reported a wood shortage in Q3 2020.

Steel and pipes are the other most frequently reported shortages. Twenty-nine percent report a shortage of steel, up 15 points from 14% in Q1 2021; while 12% report a shortage of pipes/PVC.

For more CCI results from this quarter, methodology and shareable charts, visit commercialconstructionindex.com.

About the authors

Thaddee Swanek

Senior Writer and Editor-in-Chief, Strategic Communications

Thaddeus is an editor and managing editor on the strategic communications team at the U.S. Chamber of Commerce.

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