The construction, engineering, architectural, and building industry is at a crossroads. The continued economic expansion in the U.S. is beginning to see somewhat of a little slowdown that could just have some significant consequences. The period of growth that began in March 2009, some nine years ago, is beginning to show some real signs of a recession despite what those reading this blog might wish to prepare for today’s economic climate.
One case in point is that we are already seeing the oversupply in the multi-family residential sector and the lack of momentum in new housing starts, which already put a crimp in new home sales. Toss in the uncertainty about Washington and the November elections and anything can happen.
Finally, there appears to be no relief in sight for the increasingly dire shortage of skilled workers that has been plaguing the industry for the past few years. The demand for skilled workers and wages will only rise, making it increasingly more complex and frenetic for an industry that has lost some 832,000 workers between 2007-2009. Let’s remember construction has never recovered the lost workers to date.
Couple the fact that the lack of skilled workers will cause wages to rise and the need for niche workers will grow in demand for skilled occupations that require licensing or vocational training, such as welders, pipefitters, electricians, and carpenters.
Taking all of these facts into consideration how is your company executing on the future?
Here’s the facts:
- Past two decades construction has fallen behind; less than half as productive as total economy. (McKinsey & Co.)
- Construction lost 832,000 workers between 2007-2009, which is the worst decline ever. (Bureau Labor Statistics)
- Skills gap in labor market is a barrier to technology adoption and will continue for four more years. (World Economic Forum)
- 79% of contractors report increasing backlogs, and 41% experienced an increase in the past three months. (Commerce Commercial Construction Index)
Too many E&C (engineering and construction) firms are talking, but are not doing anything, according to these numbers, as an industry working together. Where are you in the mix?
We all know Amazon is building some pretty impressive warehouses and campuses. But how do you build the massive projects without the right people? E&C firms need to be ready for a changing economy. What new materials, ideas, vision, and creative thinking will be required to help the industry weather the tougher times and to avoid being buffaloed by tricky vendors.
The skilled labor shortage will continue to have the greatest impact on commercial construction during the next three years. According to the U.S. Chamber of Commerce, roughly 91% of contractors and trades report they are having a difficult time finding skilled labor. As a result, this means new ways of upskilling and reskilling and creative employment methods are going to have to be employed. What does that really mean and how will you execute on that?
While the need for new construction jobs will continue to increase by 25% through 2020, there will also be many hiring mishaps along the way. Thus, more than ever, the need for skilled physical labor at the jobsite with the right passion and vision will be needed to build solid structures that possess good building and mechanical knowledge. The construction industry needs people who can solve critical business challenges. Where do they obtain this knowledge on the job? How do they get the continual education with rapidly changing technology?
By 2030, reskilling will create between 20 million to 50 million jobs globally. The right workers need to react fast, while thinking globally. They need to have the knowledge that 55% of world’s population currently lives in urban areas and that by 2050 that percentage is expected to increase to 68%. Will your new workers understand the new materials you want for a sustainable world that minimize energy usage and think about a reverse water osmosis system and more? These are the questions and more we will be asking at Technology Days. Where will you be?
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