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AGC: Firms face ‘one-two punch’ of COVID slowdown, labor shortage

As contractors contend with project delays and cancellations amid the coronavirus pandemic, many are still struggling to find skilled workers, according to a survey from the Associated General Contractors of America.

AGC polled more than 2,000 construction companies nationally in August about how they were faring during the COVID-19 pandemic. The group found 60% of the respondents have seen future projects delayed or canceled since the pandemic began this past spring, and another 33% have seen a project that was already underway have to be shut down because of the coronavirus. Meanwhile, 52% of the respondents said they were still struggling with a source of concern that pre-dated the outbreak: a shortage of skilled labor.

“Few firms have survived unscathed from the pandemic amid widespread project delays and cancellations,” said Ken Simonson, AGC chief economist, in a statement. “Ironically, even as the pandemic undermines demand for construction services, it is reinforcing conditions that have historically made it hard for many firms to find qualified craft workers to hire.”

The combination of misfortunes has amounted to a “one-two punch” for the construction industry, said Stephen Sandherr, CEO of the AGC, and show industry’s need for federal help is great.

In addition to polling contractors nationally, AGC also released responses from 386 Midwest firms and responses from 36 Wisconsin contractors.

The results suggested that many companies experienced project shutdowns or cancellations during the pandemic. Of the respondents from the Midwest, 68% said they’d seen some projects halted, postponed or canceled. Nationally, 66% of the respondents said they’d seen similar project delays or cancellations. And in Wisconsin, 80% of the respondents they’d seen projects delayed, stopped or cancelled.

Among the respondents from the Midwest, 55% said they were struggling to fill open craft positions. Laborers, carpenters and heavy-equipment operators were the most in-demand craft positions, according to the survey. Companies in the Midwest were most commonly struggling to find salaried project managers and engineers.

Of the Wisconsin contractors surveyed, 44% said they were struggling to find hourly craft workers and 22% said they had no trouble filling open craft positions.

Meanwhile, 42% of the Midwest respondents said they expected to recall furloughed workers or add new employees in the next year, and another 36% said they didn’t expect to change their workforce.

Wisconsin contractors were less optimistic about a speedy recovery from the coronavirus. According to the survey, 42% of the respondents in the Midwest expected it could take six months or more for work to return to the pace seen last year. Another 30% of the respondents said that, despite the pandemic, their pace of work this year matches or exceeds last year’s.

Of the Wisconsin respondents, 53% said it could take six months or more for work to measure up to last year. And 14% said they were doing the same or better than they were last year.

The survey also asked companies what federal action they’d like to see in response to the pandemic. Most respondents said federal infrastructure spending and rules blocking lawsuits over COVID-19 exposure in the workplace would help them recover.

The survey found 59% of the Midwest respondents hoped to see a large federal infrastructure investment, and 55% of the respondents hoped federal officials would pass rules protecting companies from liability for failing to prevent a COVID-19 infection.

“There is a lot that Washington (D.C.) officials can do to help boost demand for construction projects and get more people back to work rebuilding the economy,” Sandherr said. “The challenge is that the coronavirus has put many contractors in the position of looking for work and workers at the same time.”

About Nate Beck, nbeck@dailyreporter.com

Nate Beck is The Daily Reporter's construction staff writer. He can be reached at (414) 225-1814 (office) or 414-388-5635 (mobile).

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