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Hourly Wages for Production Workers Climb 5.1 Percent over the Year, Outpacing Overall Private Sector; Association Survey Finds Most Contractors Plan to Add to Headcount in 2024 but Anticipate Difficulty

The construction sector added 17,000 employees in December and continued to raise wages at a faster clip than other industries, the Associated General Contractors of America reported in an analysis of government data released today. Association officials said the survey it released this week found contractors expect to hire more employees in 2024 but are struggling to find enough qualified workers.

“The above-average wages that the construction industry pays have helped contractors add workers,” said Ken Simonson, the association’s chief economist. “More than two-thirds of firms in our survey say they plan to expand in 2024 but they expect it will be as hard or harder to do than it was in 2023.”

Construction employment in December totaled 8,056,000, seasonally adjusted, an increase of 17,000 from November. The sector has added 197,000 jobs during the past 12 months. That was a gain of 2.5 percent, which outpaced the 1.7 percent job growth in the overall economy. Residential building and specialty trade contractors added 5,500 employees in December and 40,100 (1.2 percent) over 12 months. Employment at nonresidential construction firms—nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—climbed by 11,900 positions for the month and 157,300 (3.4 percent) since December 2022.

Average hourly earnings for production and nonsupervisory employees in construction—covering most onsite craft workers as well as many office workers—climbed by 5.1 percent over the year to $34.92 per hour. Construction firms in December provided a wage “premium” of nearly 19 percent compared to the average hourly earnings for all private-sector production employees.

In a survey the association released on Thursday, 69 percent of the nearly 1300 responding construction firms reported they expect to add to their headcount in 2024, while only 10 percent expect to reduce headcount. But 55 percent of respondents, including both union and open-shop employers, expect it will be as hard or harder to do so than in 2023.

Association officials observed that contractors will have trouble completing the infrastructure, renewable energy, and advanced manufacturing projects the Biden administration is counting on unless they can hire enough skilled workers. They urged officials in Washington to reform employment-based immigration policies and boost funding for career and technical education programs that will enable more people to qualify for rewarding jobs in construction.

“Contractors are eager to build the structures that will sustainably improve the nation’s productivity and quality of life,” said Stephen E. Sandherr, the association’s chief executive officer. “Limiting who can work in construction undercuts the sector’s ability to deliver projects on time and on budget.”

Click here for A Construction Market in Transition: The 2024 Construction Hiring & Business Outlook. Click here for the survey results. Click to watch a quick video about the results. Click here for employment table.