A sever laborshortage will continue to plague the construction industry through2019, driving up construction costs further. A recent report fromthe Associated General Contractors of America shows that 79% ofconstruction companies want to hire more employees this year, butthe industry is only estimated to grow its workforce by .5%annually for the next 10 years. That is hardly enough to make upfor the 600,000 jobs lost since the last recession.

“A few factors are driving the construction labor shortage andlack of labor growth,” John Wagner, nationalconstruction director at global insurance brokerage firmGallagher, tells GlobeSt.com. “For one,construction is not an attractive industry to millennials. Inaddition, 600,000 workers left the industry during the greatrecession and have not returned. One reason for this is that thehealthcare and social working industries are attracting moreworkers than the construction industry. Finally, the United Statesis experiencing a slower population growth and an agingworkforce.”

The labor shortage has had a direct impact on constructioncosts, and along with rising materials costs and land prices, newdevelopment has become burdensome. According to Wagner,construction costs increased 6.2% last year. “The majority of theincrease coming from increased labor costs,” he says. “With laborshortages, projects take longer and bid contracts also become moreexpensive.”