Construction Labor Availability in 2017 Looks Mixed

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By Sean Forbes

The construction industry faces another tough year of tackling skilled labor shortages, and the outlook for improvement in 2017 appears mixed.

Jobs that require higher levels of education, such as civil engineering positions, are in especially tight demand, Brian Schaitkin, senior economist for the Conference Board, told Bloomberg BNA.

A tighter labor market also means it’s taking longer to fill open construction positions, Schaitkin said, citing findings from DHI Group Inc. On average, it takes nearly 16 days to fill open positions, which is the longest period since the height of the housing boom.

“In addition, skilled-trade workers like crane and tower operators and electricians, will also be at a premium because they take a long time to train, the work must be done in a specific location, and a large share of these workers will be retiring over the next decade,” Schaitkin said.

The Conference Board’s research shows that shortages range from a low of 10 percent for drywall installers, ceiling tile installers and tapers, to a whopping 96 percent for construction and building inspectors. The New York-based Conference Board is an independent, nonprofit business membership and research organization.

However, there’s a bit of bright news, according to Washington-based Associated Builders & Contractors Inc., which represents merit shop firms.

Construction firm leaders said their sales expectations, profit margin expectations, and staffing level intentions remain positive, according to ABC’s most recent Construction Confidence Index report. Sales expectations dipped slightly from the previous report, from 67.0 to 64.1, as did profit margin expectations, from 62.8 to 61.1, but staffing intentions rose to 64.9 from 63.9. Any reading above 50 indicates growth.

The difference between “expectation” and “intention” is “largely that sales are not strictly under the contractors’ control (an expectation) while they control if they hire (an intention),” Jeff Leieritz, ABC’s senior media relations manager, told Bloomberg BNA.

Infrastructure Funding—Help or Hurdle?

“There is no doubt that there is a labor shortage in the construction industry,” Tony Kempf, vice president of Kansas City, Mo.-based Garney Construction, told Bloomberg BNA.

Whether additional infrastructure funding proves a boon is uncertain at this point, Kempf said. Congress approved additional funding last year under the Water Infrastructure Finance and Improvement Act (WIFIA) program that may help Garney’s business sector—his firm specializes in the water and wastewater industry—but how that relates to the labor shortage remains to be seen, he said.

More funding for infrastructure could actually exacerbate the labor shortage, Kempf said. If the WIFIA funding creates more projects and additional funding becomes available for infrastructure, “I think we will definitely see a continued strain on the industry” as it relates to labor, he said.

However, Garney may have a leg up on its competitors as an employee-owned company, Kempf said. As such it can provide benefits that others may not be willing or able to offer to their craft employees, he said. But recruiting is still a challenge, he said, noting, “We have had to be more creative in where we look for labor help and how we advertise job openings.”

Kempf said Garney employs several strategies to find workers, such as using new websites that advertise jobs, posting openings on billboards near job sites, handing out business cards that list the company’s benefits, and doing outreach through military and other career fairs, and through trade school and high school workshops.

Trump: A Question Mark

Asif Choudhury, national secretary for the Construction Financial Management Association, based in Princeton, N.J., said that what to expect after Donald Trump becomes president is up in the air. “On the positive side, we have a president-elect who has been involved in this industry and understands this sector,” Choudhury told Bloomberg BNA. “On the other hand, he has limited government experience, so how to navigate through that is still a question mark,” Choudhury said. The CFMA provides support and networking for construction finance professionals in the U.S.

As for whether Trump’s administration will alleviate the labor crunch, Kempf said, his company is “taking more of a wait and see approach.”

Choudhury, who’s also president of Bahar Consulting LLC, in Washington, said the industry is facing headwinds inherent to construction—such as physically demanding labor that, in some cases, leaves workers disabled—that make the field unappealing as careers for many people.

“I never heard anybody in college say ‘I want to work out in the field.’ It’s just not there,” Choudhury said.

The fields that are most likely to grow will probably be those that require technological proficiency, which have higher income potential, rather than those that involve primarily physical labor, he said.

But as it stands now, firms that want to recruit good workers for the field or the office often have to poach from their competitors, Choudhury said. And employers will need to have good benefits packages to keep workers aboard, including retirement, health and wellness offerings, he added.

To contact the reporter on this story: Sean Forbes in Washington at sforbes@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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