Estimating The Influence Of Economic Cycles On Construction Labor Shortages

Abstract

Construction labor shortages significantly constrain project performance and obstruct national infrastructure development plans in the US and Canada. Although multiple research efforts underscore the linkages between labor shortages and economic cycles, empirical quantification of how fluctuations in economic conditions affect labor shortages remains limited. This study bridges this gap by estimating the impacts of macroeconomic indicators on construction labor shortages in the US and Canada. A panel data analysis employing fixed-effects models was conducted using publicly available macroeconomic data - including interest rates, exports, imports, and residential building permits - as explanatory variables for labor shortages. Two panels comprising 18 states in the US and 10 provinces in Canada, respectively, were used to examine the impacts of macroeconomic conditions on the construction labor market. Results highlight interest rates and exports as key predictors, revealing that a 1% change in interest rates or exports is associated with statistically significant changes in construction labor shortages four to five quarters later. These findings provide construction planners with actionable foresight, emphasizing the importance of proactively aligning labor management strategies with anticipated macroeconomic shifts. By leveraging such empirical insights, the construction industry stakeholders can better anticipate and strategically mitigate the adverse consequences of labor shortages.

Department(s)

Civil, Architectural and Environmental Engineering

International Standard Book Number (ISBN)

978-078448698-6

Document Type

Article - Conference proceedings

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2026 American Society of Civil Engineers (ASCE), All rights reserved.

Publication Date

01 Jan 2026

Link to Full Text

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