Construction industry cites labor shortage as top concern

Finding enough qualified workers remains a top concern in the construction industry, according to the 2024 State of the Construction Industry Study released by The Bonadio Group. “The number one construction issue we’ve seen for several years … is labor shortages,” Nancy L. Cox, Bonadio’s construction and real estate industry leader, says.  The 2024 study surveyed more than 100 companies and construction leaders across upstate New York on industry sentiments, greatest challenges, and the future outlook. The survey found that 76 percent of respondents said attracting and retaining workers is extremely important, with 65 percent indicating they are struggling to find labor.  Struggling to find help has business consequences. About 60 percent of companies responding to the survey noted they did not bid on at least one job due to labor shortages, with 56 percent of those failing to bid on between three and five jobs. Ten percent failed to bid on 10 or more jobs due to lack of workers. Companies indicated several initiatives they have undertaken to combat the worker shortage with 61 percent implementing some sort of internal training program. About 22 percent have stepped up recruiting efforts, 17 percent have increased compensation and benefits, 16 percent are working to improve company culture, and 11 percent are providing cross training to employees as strategies to increase their qualified labor pool. Looking ahead, 43 percent of responding companies view the challenges of finding skilled labor as the biggest threat to business over the next year. About 14 percent are concerned about an overall lack of work, while 11 percent indicated banking concerns, with another 11 percent citing increased labor costs. But the picture isn’t all gloomy, Cox notes. “Ninety five percent of our respondents were more profitable,” she says. And 88 percent noted they were profitable last year. “We asked about backlog since backlog is always a sign of the economy,” she adds. For 73 percent of companies, their backlog either increased or stayed the same. “We thought that was a good indicator that the economy is still okay.” Another notable trend in the survey is a decrease in the number of respondents performing primarily public projects at 48 percent, while 52 percent are primarily doing private work. Cox speculates this is due to the complex nature of public projects. “It’s a challenging time, but I think with challenge comes opportunity,” she says. Companies participating in the Bonadio State of the Construction Industry Study represented four size categories — under $10 million, $10 million to $24.9 million, $25 million to $49.9 million, and greater than $50 million in revenue. The construction firms represented the Capital Region/North Country, Central New York, Finger Lakes, Southern Tier, and Western New York regions. The survey was distributed through targeted emails and with assistance from the Associated General Contractors of New York State, Builders Exchange of Rochester, Builders Exchange of the Southern Tier, Construction Contractors Association of the Hudson Valley, The Construction Exchange of Buffalo and Western New York, Eastern Contractors Association, Mohawk Valley Builders Exchange, Northeastern Subcontractors Association, and Syracuse Builders Exchange. The Bonadio Group, a Rochester–area-based accounting group, has offices across New York state in Syracuse, Clinton, Albany, Amherst, East Aurora, and New York City. It has additional offices in Dallas, Texas; Rutland, Vermont; and Virginia Beach, Virginia.