WWhile standing on the sidelines watching a high school football game, my friend, the owner of a successful small construction company, complained that his son – a senior – was starting this fall at a respected local university, which would cost about $200,000 over the next four years.
“I could take the same money and create it in a contracting business,” he said. “It would be a much better investment.”
It was 2010. The kid went to this university and graduated with a degree in history four years later. Where do you think he is now? Work in the construction sector.
Ask anyone in the construction industry and they will complain about the lack of qualified workers in their trade. The numbers confirm these concerns. The Associated General Contractors of America reported Last year, 92% of companies struggled to fill positions and 45% delayed at least one project due to a labor shortage. A labor shortage model from the Associated Builders and Contractors estimates that the industry must attract 499,000 workers in 2026 to meet demand. National Association of Home Builders estimates this number could reach 723,000 per year.
Why this shortage? One reason is that younger workers have shifted away from manual labor in recent decades to office jobs. Older workers are getting older – National Center for Construction Education and Research estimates that approximately 41% of the current construction workforce will retire by 2031. And the current administration immigration policy has not only dried up the flow of potential foreign workers, but also pushed many construction workers – even those with the required papers – underground.
The construction of data centers jumped In recent years, construction workers on these projects have been in such high demand that they’re seeing salaries increase 25 to 30 percent over their previous jobs — and in some cases, much more. Good for them, but it won’t last forever.
What will happen very soon – as interest rates continue to fall and new tax incentives begin to take hold – new demand, both from home buyers and businesses looking to build and buy properties, will return – after more than five years – and will be strong. This is a cyclical industry. Things are at their worst. But when the recovery takes place, the peak will be high. Which means there will be a huge need for workers in new construction.
For many in the industry facing such labor shortages, this scenario is daunting. I think the opposite.
Thanks to AI, entry-level jobs and meaningless white-collar jobs will disappear. Where will they go? There will be other opportunities – startups and new jobs we’ve never heard of (20% of current jobs didn’t even exist in 2000). But many will turn to careers – an area where AI cannot replace them.
We are already seeing this trend growing. Trade school enrollment has increased significantly since the pandemic and is should increase up to 7% per year until 2030, a rate significantly higher than other forms of higher education. The ranks of students studying construction trades only pink 23% in the past year, according to another report. Young people are not stupid. They follow the money.