CCI: COVID’s Impact and the Struggle to Find Workers

According to the Q4 2021 Commercial Construction Index (CCI), released quarterly by the U.S. Chamber of Commerce and Dodge Data & Analytics, 60% of contractors say that less availability of building products and materials is, by far, the top consequence of the COVID-19 pandemic. Additionally, 52% of contractors say that worker shortages are their top concern.

COVID Contributes to Challenges

According to the data, contractors reported COVID-related delays during the last quarter of 2021. Two-thirds (66%) of contractors are experiencing delays on some projects, which is up seven points from last quarter. Just under a third (29%) report they don’t expect delays, and 71% expect delays to continue three months from now.

The percentage of projects delayed grew slightly this quarter. Contractors reported on average that they expected 18% of their projects to be delayed, compared to 15% last quarter.

Contractors also report seeing big impacts from COVID-19. A majority say less availability of building products (60%) and an increase in worker shortages (52%) are top concerns related to the pandemic. Of relatively less concern is the pandemic’s impact on worker health and safety (35%), more project shutdowns/delays (30%) and fewer projects (19%).

Difficulty to Find Workers Continues

Contractors say the already-chronic problem of finding enough skilled workers was still difficult in Q4. The majority (91%) of contractors report moderate to high levels of difficulty finding skilled workers, up three points from Q2, and 62% of contractors report high levels of difficulty finding skilled workers, rising seven points from last quarter. According to the report, this is 20 points higher than a year ago when 42% of contractors reported high levels of difficulty in finding these workers.

Contractors are also concerned about workers having adequate skills, with more than half (56%) reporting a high degree of concern, up six points from last quarter and 20 points year-over-year.

According to the report, the lack of skilled workers has contractors turning down work and putting in higher bids for projects. More than half (60%) of contractors are putting in higher bids for projects (up from 58% in 2020 Q4), and 45% of contractors report turning down work due to skilled labor shortages (up from 39% in 2020 Q4).

Looking Ahead

Despite the labor shortage, contractors are reportedly eager to hire. More than half (54%) of contractors say they will employ more people in the next six months (up from 51% in Q3). Slightly less than half (41%) expect to keep the same number of workers on staff, and only 2% expect to reduce their staffing.

“This hunger to hire suggests contractors will be fighting one another to access a tight labor pool over the coming months,” according to the report.