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--Faster Hiring Pace In Construction Than Overall Economy
--Baby Boomers Retiring Exacerbating Worker Shortage
By Vicki Schmelzer
     NEW YORK (MNI)   - The construction industry's struggle to find craft
workers has become widespread and is not going away anytime soon, according to
the findings of a survey released this week by Autodesk and the Associated
General Contractors of America. 
     The national survey of 1,608 companies in the industry found that 70% were
having difficulty filling hourly craft positions. 
     "In the short-term, fewer firms will be able to bid on construction
projects if they are concerned they will not have enough workers to meet
demand," said Stephen Sandherr, chief executive officer for the Associated
General Contractors.
     "Over the long-term, either construction firms will find a way to do more
with fewer workers or public officials will take steps to encourage more people
to pursue careers in construction," he said. 
     The survey respondents were involved in various construction projects:
private offices, public buildings, retail, warehouse, lodging, hospital, schools
and colleges, Federal, manufacturing, highway, multifamily dwellings, water and
sewer and "other transportation."
     Thirty-five percent of those polled had difficulty filling some "salaried
office positions," 38% "some salaried field positions" and 16% "some hourly
office positions," while a whopping 70% had a hard time filling "some hourly
craft positions."
     Of the top five craft positions, 58% of those surveyed had difficulty
finding carpenters, 53% finding bricklayers, 53% electricians, 51% concrete
workers, and 50% plumbers. 
     Other scarce workers included cement masons, laborers, equipment operators,
pipelayers and drywall installers.   
     A net 43% of those surveyed said it will continue to be "hard to hire"
hourly craft in the coming 12 months.
     The survey found that 38% of respondents said they were losing hourly craft
workers to other construction firms in their area and 12% were losing workers to
firms outside their area and 20% to other industries in their area. 
     As a result, 50% of those polled said they had increased base pay rates,
24% said their firm provided incentives or bonuses, and 20% increased the
portion of benefit contribution and or improved employee benefits. 
     And 10% of those surveyed said they were considering wage increases and or
benefit improvements in "the near future."
     To address the worker shortage, 47% of companies surveyed have used
overtime hours, 46% in-house training, 41% subcontractors, 35% interns and 27%
career building programs at high schools, colleges and career/technical
institutions. 
     Additional problems for the industry to overcome are the lack of bilingual
Spanish instructors/managers, prohibitively high housing costs for workers and a
lack of transportation. 
     MNI participated in the survey conference call and asked the panel for
background about shortage of craft workers. 
     "This has been a long time coming," said Ken Simonson, chief economist, at
the AGC. 
     "In some ways, you could trace it back 20 years or more to the push among
parents and high school teachers and guidance counselors to send everybody to
college and kind of shun construction or other hands-on work," he said. 
     The U.S. financial crisis, with negative spillover effects on the housing
industry, also prompted some in the industry to look for more recession-proof
careers, he said. 
     But, there were already warning signs in the construction industry well
before the crisis began, Simonson said. 
     "Construction had the longest and deepest downturn in employment of any
industry - it began in 2006, well over a year before the general slump in
employment and it didn't end until January 2011," he said.
     This five-year downturn "cost 2.3 million employees their jobs in
construction," Simonson said, "That was a huge hole to dig out of." 
     Some working in construction retired or went on to other careers and given
the lack of "help wanted" signs in the industry, "people who might have chosen
construction as a career went elsewhere," he said.
     Since January 2011, the industry has been hiring workers "at a stronger
rate than the overall economy," Simonson said.
     In the past 12 months, construction has added workers at a 3% pace versus
about 1.5% for the overall economy, he said.  
     Nevertheless, "construction employment is still 11% below the all-time
peak, whereas the economy as a whole is setting records and now unemployment is
down to a 16-year low of 4.3%," Simonson said.  
     In terms of remuneration, "construction pays about 9-10% more than the
economy wide average, he said.
     Of potential interest to recent college graduates with no particular game
plan, "Someone starting off in construction can make a whole lot more than
working in retail or hospitality jobs," Simonson said.  
     Looking ahead, the skilled-trade problem will not be easily solved.
     "The biggest source of our labor shortage is the baby boomers retiring,"
said Aaron Benike President of Benike Inc, a construction company in Rochester
MN in Q&A. 
     "We see this in our area and specifically in our company; it's going to get
worse before it gets better," he said.
     AGC's Simonson noted that "historically - for decades, the U.S. labor force
grew about 1% per year, but for the next decade or longer, we're going to have
nearly as many baby boomers retiring as you'll have American-born entrants into
the workforce."
     "And so, continued growth of the workforce whether it's for construction or
any other sector is going to depend on having an adequate supply of immigrants
or attracting a higher percentage of people who are now staying out of the
workforce back into it," he said. 
--MNI New York Bureau; tel: +1 212-669-6438; email: vicki.schmelzer@marketnews.com
[TOPICS: M$U$$$,M$$FI$,M$$FX$]

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