The Expert Podcast

You thought it was bad before—wait until you see how the next two years unfold for the construction industry workforce. The shortage of workers in all aspects of construction has been a crisis for the last year and a half or two years. Everything from skilled trades to licensed subcontractors, electricians, even day laborers and framers—there's been a shortage. It’s been tough for every aspect of construction to get enough coverage. Even supporting trades, like lumber mills and delivery drivers, have felt the strain.

According to industry experts, it's only going to get worse. Industry trade publications and financial analysts who study the building and contracting industry predict that the situation will intensify over the next six months. This could become a long-term problem that takes a toll on the rest of the economy. A significant portion of costs in various industries is tied to construction. If you have a warehouse or a retail facility, all of those structures originate from a construction project.

If the budget for a construction project increases—combined with a higher interest rate on the capital for that project—that results in a permanent additional cost for that infrastructure. These costs get baked into the fixed expenses of that facility. As a result, the overall price of building anything will be higher, which will then impact the cost of products manufactured, sold, or transported through those facilities for their entire lifespan.

How much more are we talking about? According to reports, due to rising employee costs, projects originally estimated at $500 million may now cost $600 million. Companies must pay workers more, and projects take longer, increasing overall expenses. Take that extra $100 million and factor it into commercial projects like airports, warehouses, or manufacturing plants—then add the additional financing costs for that extra amount. This leads to higher mortgage payments and increased operational costs for those facilities, creating a domino effect on the broader economy.

This is a self-reinforcing cycle. All the employees working on these projects are also consumers. They need to buy goods and services from companies that operate within the buildings they construct. Because of this, they’ll demand higher salaries to afford everyday expenses, further driving up costs across multiple industries. This cycle isn't slowing down anytime soon.

Part of the problem is the aging workforce in skilled trades. Many experienced workers are now in their late 50s, 60s, or even early 70s, and the physical toll of construction work makes it difficult for them to continue. Meanwhile, there isn’t a strong pipeline of younger workers entering the industry.

Even if you look back at old episodes of This Old House from the 80s and early 90s, when tradespeople came in to do a job—whether it was a plumber, electrician, concrete worker, or landscaper—many were part of family businesses. You often saw fathers, sons, brothers, and even grandchildren working together. That career pathway is disappearing. Fewer people are entering the construction industry, and those who leave other jobs are unlikely to switch to something as physically demanding as construction.

Although blue-collar jobs such as construction workers, diesel mechanics, and aircraft mechanics offer higher wages, the pay difference isn’t significant enough to attract new workers. Many potential employees choose jobs in Amazon warehouses, social media management, or software-related fields instead. This shortage is already affecting the costs of both commercial and residential construction.

Unlike other industries, construction cannot be easily replaced with automation. Programming, coding, sales, customer service, and retail jobs can be automated with computers, self-service kiosks, or AI-driven software. But construction still requires human hands, strong backs, and physical labor—tasks that robots cannot yet perform. The labor shortage will continue to impact the industry for years to come.

There is no incoming wave of workers graduating from trade schools, colleges, or high schools eager to enter the construction field. If you’re a general contractor, you need to focus on retaining your current workforce and skilled tradespeople. If you have connections with subcontractors, you should work on maintaining those relationships and even help them recruit workers to fill critical roles.

Let us know what you think in the comments. How is this affecting you? Have you experienced challenges in finding employees or subcontractors to complete your projects?