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News June 23, 2021

Labor shortage leads contractors to turn down work

Materials shortages, cost fluctuations and a lack of skilled labor continue to affect the construction industry.

The U.S. Chamber of Commerce Commercial Construction Index reports 84% of contractors are facing at least one material shortage, according to

Additionally, 46% of contractors say less availability of building products has been a top concern compared with 33% last quarter. Thirty-three percent are experiencing a shortage in wood/lumber, and 29% are experiencing a shortage of steel. Of the contractors experiencing shortages, 46% say the shortages significantly are affecting projects.

Ninety-four percent of contractors say cost fluctuations are having a moderate to high effect on their businesses.

Finding skilled labor continues to be a challenge for contractors as 88% report moderate to high levels of difficulty finding skilled workers—45% report a high level of difficulty. Of those who report difficulty finding skilled labor, 35% have turned down work because of skilled labor shortages. Eighty-seven percent of contractors also report a moderate to high level of concern about the cost of skilled labor. Of those who expressed concern, 64% say the cost has increased during the past six months, and 77% expect it to continue to increase during the next year.

Despite challenges, the overall index score rose three points to 65—its highest reading since a score of 74 during the first quarter of 2020 ahead of the pandemic—and contractors are optimistic about outlook for revenue expectations, new business opportunities, hiring plans and equipment spending.

“Businesses are experiencing a great resurgence as vaccines allow the economy to fully reopen,” said U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley. “Rising optimism from the commercial construction industry reflects what we’re seeing across the broader economy. However, contractors continue to face challenges navigating materials shortages and finding enough skilled workers to avoid having to turn down projects. That’s why the U.S. Chamber is calling on elected leaders at the federal and state level to take action to address the workforce crisis.”


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