Construction Firms Struggle With Worker Shortages, Supply Chain Challenges

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The vast majority of California construction firms have open jobs and are struggling to fill them, according to a survey released Thursday by the Associated General Contractors of America and Autodesk.

The survey polled more than 2,000 firms nationally and 85 firms in California on their pandemic recovery and found that the majority were suffering from worker shortages, supply chain disruptions and rising material costs, all of which contribute to nearly nine out of 10 firms experiencing project delays.

"Prior to the pandemic, construction firms have typically either been worried about finding enough work to keep workers busy or worried about finding enough workers to keep pace with demand," Stephen Sandherr, CEO of AGCA, said at a panel discussing the survey's results. "But today, largely because of the pandemic, construction firms are both worried about finding enough work even as they struggle to find enough workers." 

The top two reasons firms in California cited for their lack of workers were available candidates not being qualified and furloughed workers preferring unemployment benefits to continuing to work. Only 15 percent of firms that tried to recall furloughed workers said the workers chose not to return due to risk of COVID-19 exposure or family responsibilities, half the percentage of firms in Western states at large, according to the survey.

A quarter of respondents nationally said it will take over six months for their revenue to meet or exceed what it was prior to the pandemic, and 17 percent were unsure when to expect demand to return to previous levels. 

To adapt, most firms said they have increased base pay rates and some have started offered hiring bonuses or incentives to attract more workers. In California, nearly 40 percent of firms surveyed said they began using online learning programs for increased training.

Allison Scott, director of construction thought leadership and customer marketing at Autodesk, said these pandemic responses will help move the industry forward as market conditions improve.

"Although we are still in the midst of a labor shortage, it is really promising to see that the industry is branching out in new ways," Scott said. "I do think it indicates a crucial and cultural shift in construction that ultimately will pay dividends in the long run."

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