Q2 2024: Labor
The south-central region has been the biggest beneficiary of the tech exodus from Silicon Valley in the past year
with 44 of the 47 companies that relocated to Texas. As a result, the cost of building in Texas has increased considerably. Construction spending has doubled but the construction labor force has only grown by 30% according to the 2024 Cummings report on US regional construction. Projects are competing for local labor and workers are demanding higher wages [5].
The southeast is experiencing a similar construction boom with large amounts of growth in Florida, especially the Miami region, and the Carolinas. Southeast construction spending is up 60% while construction labor is only up 45% causing construction firms to compete for labor [6].
Traditionally low-cost areas are witnessing a sharper incline in construction trade wages in part due to demand for workers and also to the Department of Labor’s reinstatement of calculating prevailing wages which is boosting wages in regions with moderate-to-weak union presence, according to the director of data operations at Gordian [7].
U.S. Bureau of Labor Statistics shows their data for the employment of construction laborers by State for May 2023. [8]
Top 3 states with the highest employment level in Construction Laborers in May 2023:
Texas: 115,770 [annual mean wage $38,990]
California: 89,950 [annual mean wage $61,710]
Florida: 69,690 [annual mean wage $40,680]
[8]
[5] Cumming Group. (n.d.). Market Analysis 2024. Retrieved June 3, 2024, from https://mcusercontent.com/f3fd6f149a0c039fb3efbd70f/files/103d437e-d961-a132-d19b-fd7116da7263/CCORP24Q1_MarketOverview_v4.pdf
[6] Ken Simonson. (n.d.). US Construction Outlook: Torrid or Tepid? Associated General Contractors of America. Retrieved June 3, 2024, from https://www.agc.org/sites/default/files/users/user21902/Construction%20trends%20%26%20outlook.pdf
[7] Giffin, S. (2024, April 16). How the new prevailing wage calculation will impact construction labor costs. Building Design + Construction. https://www.bdcnetwork.com/how-new-prevailing-wage-calculation-will-impact-construction-labor-costs
[8] U.S. Bureau of Labor Statistics. (2024, April 3). Construction laborers. U.S. Bureau of Labor Statistics. https://www.bls.gov/oes/currenT/oes472061.htm