Dive Brief:

The Trump administration has cancelled plans for an Obama-era local hiring initiative for federally funded public works projects, according to The New York Times.

The Department of Transportation program was still working to obtain approvals, which were not yet in place. The administration did not say why it halted the plans.

A related study looking at the economic effect of enforcing local hiring rules on a per-project basis could also be in jeopardy. That program was tested in New York, California and Texas, among other states, and had been granted a five-year extension in the last days of the Obama administration.

Dive Insight:

The skilled-labor shortage continues to challenge the construction industry’s ability to find enough workers. In some cases, that’s preventing companies from meeting local hiring requirements.

For that reason, contractors on the Detroit Red Wings’ Little Caesars Arena, currently under construction, are facing nearly $3 million in fines. Local officials have said the contractors have done their due diligence to draw in local workers, such as by offering training and hosting job fairs. Yet the last time the site met its 51% minimum local hiring requirement was in August 2015.

In a report earlier this year, the Associated General Contractors found that 73% of the 1,300 member companies it surveyed expected to have a tough time finding qualified workers this year. The National Association of Home Builders said earlier this month that more builders were reporting labor shortages in July 2017 than in June 2016. Framing crews are among those in highest demand, with 77% of builders reporting some shortage or a serious shortage, followed by rough carpenters (76%), finished carpenters (74%) and bricklayers/masons (63%).

Yet the promise of creating local construction jobs remains a critical component of many project incentive packages.

The team responsible for building a $1.45 billion tire plant in Mississippi, for one, drew criticism from state lawmakers late last year over a contract that didn't include a stipulation for hiring local workers.