Americas Office Fit Out Cost Guide 2023

THE FUTURE OF CONSTRUCTION LABOR IS IN FLUX

U.S. CONSTRUCTION JOB OPENINGS AND QUIT RATES

At the onset of the COVID-19 pandemic, the overall U.S. labor market was tight, with an unemployment rate of 3.5%. Initially, the pandemic-driven recession led to job losses across most employment sectors, including construction. Most of those jobs were quickly recovered as hiring accelerated. Nonresidential construction employment, however, has not recovered the jobs it lost during the pandemic. Of the over 47,000 nonresidential construction jobs lost due to the pandemic in 2020 through 2021, 37,000 were recovered as of year-end 2022, leaving a 10,000-job deficit from pre-pandemic levels. Moody’s Analytics forecasts that just over 8,000 jobs will be added in nonresidential construction in 2023, thereby leaving an overhang deficit of more than 2,000 jobs. This deficit is forecast to be exacerbated by additional job losses in 2024. This isn’t to say the jobs aren’t available. Job openings have outpaced quit rates even during the eight quarters pre-pandemic. The pandemic accelerated this trend, and the current openings to-quits rate gap was at its widest as of Q4 2022. In order to attract talent to these open positions, the sector has raised wages consistently and significantly over the last six quarters. Wages grew 14% as of Q2 2023, nearly triple the construction employment growth rate of 5%.

6%

5%

4%

Gap at its widest

3%

2%

1%

0%

2017Q1

2020Q3 Quit Rates 2021Q1

2018Q1

2016Q1

2019Q1

2022Q1

2017Q3

2021Q3

2018Q3

2016Q3

2019Q3

2020Q1

2022Q3

Job Openings Rate

Source: U.S. Bureau of Labor Statistics (BLS)

NONRESIDENTIAL BUILDING CONSTRUCTION EMPLOYMENT

20 30 40 50

Jobs Lost + Jobs Gained

-50 -40 -30 -20 -10 0 10

8.1 -5.5

-7.8

-10.4

(Thousands)

Nonresidential Building Employment

2017

2018

2019

2020

2021

2022

Current Deficit

Forecast

Future Deficit

Annual Change 2023 2024

Source: U.S. Bureau of Labor Statistics (BLS)

8

Cushman & Wakefield