Commercial Construction Recovery Stalls as Contractors Struggle to Find Workers and Materials

91% of contractors report high difficulty finding skilled workers, and a record-high 95% are facing at least one product shortage

WASHINGTON, D.C. -- Rising costs, skilled labor shortages and lack of materials continue to create challenges for the construction industry, sending the U.S. Chamber of Commerce Commercial Construction Index (Index) down one point this quarter to 65. Contractors’ revenue expectations, a key driver of the overall Index score, fell for the first time since the start of the pandemic to 58, down three points from Q3.

“One of the most pressing issue facing our economy today is the worsening worker shortage crisis, and these findings show that construction sector, much like other industries, continues to face this challenge,” said U.S. Chamber of Commerce executive vice president and chief policy officer, Neil Bradley.

The vast majority (91%) of contractors report moderate to high levels of difficulty finding skilled labor, up three points from this summer. More telling is the fact that 62% of contractors report high levels of difficulty finding skilled workers, rising seven points from last quarter, and up 20 points from one year ago.

These challenges are leading to real-world consequences: almost half (45%) of contractors report turning down work because they can’t find enough skilled workers.

“It is critical that policymakers invest in programs to upskill and prioritize workers, pass sensible immigration reform, and remove tariffs and other trade barriers so that contractors have the workers and materials they need to get the job done,” Bradley added.

Prices and Availability of Materials Create More Challenges

This quarter, a record-high percentage (95%) of contractors are experiencing at least one product shortage, up two points from 93% in Q3, and up 24 points year-over-year. Steel (27%) remained the most-reported product shortage followed by roofing material (19%) and wood/lumber (17%).

Heightened concern around the cost of materials also stayed near an all-time high (since the inception of the CCI in 2017), as 97% of contractors indicated cost fluctuations have a moderate-to-high impact on their business. This figure is up 23 points year-over-year. Of those who said material cost fluctuations have had an impact on their business, 43% said steel was their top concern.

Trade and Tariffs Remain a High Concern

Nearly half (47%) of contractors said steel and aluminum tariffs will have a high to very high degree of impact on their business in the next three years. A similar percentage (49%) said the same about new construction material and equipment tariffs, up five points from last quarter and up 23 points year-over-year.

About the Index

The U.S. Chamber of Commerce Commercial Construction Index is a quarterly economic index designed to gauge the outlook for, and resulting confidence in, the commercial construction industry. The Index comprises three leading indicators to gauge confidence in the commercial construction industry, generating a composite Index on the scale of 0 to 100 that serves as an indicator of health of the contractor segment on a quarterly basis.

The Q4 2021 results from the three key drivers are:

Revenue: Contractors’ revenue expectations over the next 12 months fell to 58 (down three points from Q3 2021).

New Business Confidence: The overall level of contractor confidence fell to 63 (down one point from Q3 2021).

Backlog: The ratio of average current to ideal backlog rose three points to 75 (up one point from Q3 2021).

The research was developed with Dodge Data & Analytics (DD&A), the leading provider of insights and data for the construction industry, by surveying commercial and institutional contractors.

Visit www.CommercialConstructionIndex.com to access the full report, methodology and shareable graphics.

This article was originally posted on www.tile-magazine.com.