A Building Boom in the Trump Years

by Peter Quince on 2017-06-07 11:11am

Building Trades Are Poised to Bounce Back – Where Will You Find the Workers...or a Job?

Is this the boom time for construction?

Anyone who’s been around more than a decade remembers how 2003-2006 saw a construction boom. Then there was that massive drop! According to the Bureau of Labor Statistics, job losses from 2007 onward were greatest in construction, where almost 40% of jobs were shed, adding up to 2.3 million fewer construction workers in 2012 than 2007.

What you may not know is that the greatest number of U.S. jobs added up to this point in 2017 is in – you guessed it – construction. According the St. Louis Fed Survey, construction spending in March 2017 is, for the first time, higher than it was when construction spending hit its peak in February 2006. [Note: Spending has increased as has employment, but employment is still well below peak levels in 2006-2007].

Will this spending explode, now that the U.S. has elected as President a developer who has proclaimed “Nobody can build like I can build!” He has proposed infrastructure spending of $1 trillion over ten years.

Is there anything that can prevent a construction boom?

One big issue – where will the workers come from? Simply put, there aren't enough skilled workers to do the job. In particular, many firms report having a hard time finding project managers or supervisors, equipment operators, and carpenters. Part of the problem is that some of the most skilled who lost construction jobs have moved into other career paths in health care, information technology, as entrepreneurs, and so on, and are hesitant to return to a career that so recently laid them off. As Rob Moore, president of a construction firm in Salt Lake City stated, “When the market starts to come up and we start seeing more projects become available, the fear for us is where are the workers going to come from? The skilled workers that have moved into these different market segments, can we get them back into construction?” A survey by Associated General Contractors of America found that 59 percent of the Virginia contractors said they have a hard time filling salaried and craft-worker positions. Firms report they are increasing base pay and bonuses and/or benefits to retain or recruit qualified staff.

Another problem is – kids, today. Interest among high school seniors in the construction trades is far lower than it is in almost ANY other career. According to a recent survey, an overwhelming number of high school students (87 percent) hope to earn a college degree and enter a professional career. A lack of technical training in schools and less emphasis on the trades combined with an aging workforce are creating a struggle for construction firms seeking employees for positions ranging from skilled trades to managerial roles.

It’s true that contractors today looking to hire young workers complain that they lack “hard” skills, such as carpentry, masonry, etc. A lot of contractors are willing to train a promising apprentice but often find that the same young worker is even more lacking in “soft skills.” What are “soft” skills? “Employers just want someone who will get up, dress up, show up, shut up, and never give up,” but that these qualities are increasingly hard to find. According to findings from an Associated General Contractors of America (AGC) survey, “many contractors have a poor opinion of the local pipeline for preparing new workers.”

Now – the good news:

The Bureau of Labor Statistics forecasts a 10% job growth in construction jobs between now and 2026, accompanied by increasing wages in an industry that already pays workers about 33 percent above the national average. Shortages of workers along with rapid growth in the number of jobs means wages will rise.

If you’re a young person or just anyone looking to find a rewarding career, this is a great time to get into the construction trades. If college suits you, the need for project managers has never been greater. Most project managers have either an associate or bachelor’s degree in construction management and the median income of a project manager is nearing $100,000 a year. A good project manager can save a construction firm many times that amount in avoiding scheduling delays, cost overruns, fines for failing to meet deadlines, and in finding savings throughout the process. Most firms want candidates who have construction experience as well as education (most often sought at a community college). The greatest growth in construction jobs is where workers use both brain and brawn. Green construction, “smart” houses, 3-D printing of construction components, laser modeling, all of these offer tremendous career paths for the right person. As one prominent industry executive stated, “It presents an exciting opportunity for people with skills and capabilities but who have not traditionally had access to a well-paying job. This industry has a lot of them, in the trades and project management.”

If you’re a contractor, now is the time to get involved in your community. High schools in many towns in America today are looking to partner with local tradesman in programs that encourage students to look toward the building trades. These may be some of the best people to bring the newest technologies into design and building of the homes and businesses desired by the next generation.

If you’re a contractor, is this also the time to hire? After seeing so many jobs leave construction, you may be as shy as the workers who left the field to add new employees. The answer is – it depends. If you’re in an area that looks primed to grow, getting good employees now is at a premium. Don’t wait for other contractors to snap them up, Here’s a map of where construction jobs have been growing in recent years:

Construction growth is especially strong in the Seattle and Denver areas. If you’re in Virginia, it’s been modest growth so far and flat in the D.C. metro area. Most analysts say not to be fooled by this modest recent performance – that demand is pent-up, that infrastructure spending and job growth in the suburbs of D.C, will be particularly strong and continue to grow throughout the next ten years. In the AGC survey, 73% of construction firms across the U.S. plan to expand payrolls this year as contractors look for private- and public-sector demand to grow in all market segments, especially in hospitals, lodging, and single-family homes. Survey results from Virginia showed that contractors here expect more business in these sectors as well as in warehouses, renovation projects of older homes, and multi-family units.

In order to keep up, the key for all players is to stay informed, highly trained, and up-to-date on designs, market trends, methods and materials, etc. The most innovative firms will attract the best people and gain increasing market share. If you’re a licensed electrician or HVAC technician or have been working a larger construction company, this may also be a good time to get your own Virginia contractor’s license and set out on your own. When seeking continuing education, it might be time to get past completing only the minimum needed for your license, and consider it an investment in your own professional development. For example, as a contractor, you may not get continuing education credits for a class on being a Project Manager, but you’ll find that learning about it will help you hire and supervise project managers far better than before.

So – is this the boom time for construction?

In a word – youbetcha! For a Virginia tradesman or contractor (or someone thinking of going into those fields), the boom is just beginning. If you don’t act now to get the right training, right employees, or look to grow into the newest applications of green and high-tech construction, you’ll be looking back in a few years and realize it’s too late. Unlike the boom of 2003-2007, this one doesn’t look like a bubble. Almost every analyst agrees that the conditions are there for long-term, sustained growth – if you can find the workers!

Just remember these three words: Training, Timing, and People. Act now to make sure you can get the right people and the right training, because the timing is right. Consider incorporating high technology, computer modeling, and outreach to schools. Being audacious now, may be in order, otherwise, you risk getting left behind. The time to catch a wave is right as it begins its rise.

 

 

Peter Quince, the author, is a researcher and writer in the construction trades for At Your Pace Online, an online provider through VAContractorTraining.com of Virginia contractor’s license classes, continuing education for contractors, continuing education for plumbers, continuing education for electricians, and continuing education for HVAC technicians.