Global construction consultancy group Linesight released its “Construction Market Insights” report for the Americas on Thursday, showing that demand for construction workers has surged, leading to rising labor costs and increased project delays.

In the March 21 release, Linesight noted that the construction industry has shown resilience, yet while commodity prices have eased, several challenges persist, including higher finance costs due to elevated interest rates, challenging supply chain timelines for MEP equipment, and labor shortages.

The widening gap between labor supply and demand is exacerbating costs. In January 2024, average hourly earnings in the construction sector surged by 5.18%. Inadequate workforce availability also affects many projects, leading to cost overruns, project delays, and compromised work quality.

“We know that people aren't entering the construction industry in the numbers we need to keep up with demand,” Patrick Ryan, executive vice president, the Americas, said. “The industry needs to invest in upskilling workers and recruiting new talent, and it needs to be open to implementing digital technologies.”

Construction industry leaders and government stakeholders recognize that a long-term solution to persistent labor shortages will involve implementing digital technologies, such as automation and robotics, and modular and off-site manufacturing techniques.

Overall, the industry will require an additional 500,000 workers beyond the normal hiring pace to meet demand in 2024. The shortage is particularly acute for skilled workers in HVAC, carpentry, electricity, ironwork, painting, plumbing, and roofing. 

This is compounded by an aging workforce: Most U.S. states anticipate an average age attrition of 24.5% of construction laborers over the next two years.

The report can be read in full HERE.