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The U.S. Chamber of Commerce, Washington, says rising costs, skilled labor shortages and lack of materials continue to create challenges for the construction industry. These issues have sent the U.S. Chamber of Commerce Commercial Construction Index down one point this quarter to 65. Contractors’ revenue expectations, a driver of the overall Index score, fell for the first time since the start of the pandemic to 58, down 3 percentage points from Q3.
“One of the most pressing issues facing our economy today is the worsening worker shortage crisis, and these findings show that the construction sector continues to face this challenge,” says Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber of Commerce.
According to the Chamber, 91 percent of contractors report moderate to high difficulty finding skilled labor, up 3 points from last summer. It also reports that 62 percent of contractors experience high difficulty finding skilled workers, rising 7 points from last quarter and up 20 points from one year ago. About 45 percent of contractors report turning down work because they couldn'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 says.
This quarter, 95 percent of contractors report experiencing at least one product shortage, up 2 percentage points from 93 percent in Q3, and up 24 points year over year. Steel is the most common material seeing a shortage at 27 percent, followed by roofing material at 19 percent and lumber at 17 percent.
The chamber says 97 percent of contractors indicate cost fluctuations have a moderate-to-high impact on their businesses, up 23 points year over year. Of those who say material cost fluctuations have affected their businesses, 43 percent day steel is their top concern.
About 47 percent of contractors say steel and aluminum tariffs will have a high degree of impact on their businesses in the next three years. A similar percentage, 49 percent, say the same about new construction material and equipment tariffs, up 5 percentage points from last quarter and up 23 points year over year, according to the chamber.