73% of Wisconsin construction firms report labor shortages

National survey finds chronic labor shortages could significantly impact economic development

Work continues on the track for the downtown streetcar.

When real estate and construction leaders got together last week to discuss the housing needs of potential Foxconn Technology Group workers, one of their main concerns was finding enough labor to build the homes.

A new national survey of construction firms released Tuesday by the Associated General Contractors of America shows there is reason to be worried.

Construction crews work on the track for the downtown Milwaukee streetcar.

Of the 1,600 survey respondents, 70 percent said they are having a hard time filling hourly craft positions that represent the bulk of the construction workforce. The shortage is changing the way the firms operate, recruit and compensate.

These chronic labor shortages could also have significant economic impacts on future economic development unless there is greater investment in career and technical education, the survey found.

“In the short-term, fewer firms will be able to bid on construction projects if they are concerned they will not have enough workers to meet demand,” Stephen Sandherr, chief executive officer for the Associated General Contractors said. “Over the long-term, either construction firms will find a way to do more with fewer workers or public officials will take steps to encourage more people to pursue careers in construction.”

These labor shortages are coming at a time when demand for construction continues to grow.

In downtown Milwaukee, Northwestern Mutual Life Insurance Company has just completed a 1.1 million-square-foot corporate headquarters office tower, the Milwaukee Bucks are 50 percent finished with a $524 million arena project and work began on the Milwaukee Streetcar project in April.

In addition, The Couture, a 44-story luxury apartment tower, and the 25-story BMO Harris Financial Center project are both expected to break ground downtown this year.

In Wisconsin 22 firms responded to the AGCA survey. Of those who responded, 73 percent said they would be hiring craft builders in the next 12 months for expansion.

Half of the respondents said they were having a hard timing filling some salaried positions including managers and supervisors, and 73 percent said they were having a hard time filling craft positions.

The hardest craft positions to fill in Wisconsin are carpenters, followed by superintendents.

In Wisconsin, 82 percent of firms are making a special effort to recruit and retain veterans; 73 percent are attempting to recruit and retain women and 64 percent are trying to recruit and retain African Americans, according to the survey.

“Half of construction firms report increasing base pay rates for craft workers because of the difficulty in filling positions,” Sandherr said. “Twenty percent have improved employee benefits for craft workers and 24 percent report they are providing incentives and bonuses to attract workers.”

In Wisconsin, about 45 percent of firms reported that they have increased base pay rates. Only 5 percent have increased benefit contributions or improved employee benefits.

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