Construction is back but workers are scarce
Jacksonville Business Journal
It's not just that Todd Zona sometimes has trouble finding the skilled workers he needs.
Even worse is that when he can get the workers, the prices he has to pay have skyrocketed.
"Our projects are labor-intensive for framing and drywall," said Zona, the chief operations officer of Integrated Construction LLC. "We need 30-, 40-man crews. There's not that many available."
And, he said, in the past three years, the cost of framing labor, for example, has doubled.
"We've had drywallers headed to our job," he said, "and someone called them up en route and offered" to pay the crew more.
Integrated isn't the only one facing such staffing challenges.
Nationally, as the construction sector has climbed out of the depths of the financial downturn, both commercial and residential contractors face a new issue: Instead of having to fight to find work, now they have to fight to find workers.
That shortage could slow down the return of the construction industry and points to a potentially larger, more long-term issue: a new generation of workers deciding not to enter the field, creating an even more dire situation as aging workers leave the industry.
The numbers
Times have been good for the construction business, with both residential and commercial projects on the rise.
Housing starts were at a seasonally adusted annual rate of 1.2 million in July, the strongest month for housing starts since November 2007. (That number fell somewhat in the months since, about which more later.) Total construction spending, according to the federal government, totaled $960 billion in August — the most recently available figures — the highest level since early 2009.
Meanwhile, the unemployment rate for construction workers has dropped back to around 7 percent, the lowest it's been since 2007.
Good for workers, undoubtedly, but stressful for companies.
Two out of three construction companies have had trouble finding labor in the past year, according to a survey by the Associated General Contractors of America and SmartBrief, requiring about 70 percent of those companies to increase what they pay.
The problem of finding workers was particularly acute in the South, the study showed, with three-quarters of the companies surveyed saying they had experienced a labor shortage in the past year.
A National Association of Homebuilders survey showed a "widespread" shortage of labor and subcontractors.
People can be found who want to build houses, said Mark Downing, managing partner of CornerStone Homes, but not necessarily skilled workers.
"The ones [subcontractors] that decide to hire, they're finding the skill set isn't there," Downing said. "There's not a lot of 'hire this guy and put him right to work.' "
Fleeing the industry
A number of factors have combined to create the difficulty of finding workers. Among them: Many of those who worked in the industry during the boom years abandoned it when things went bust, and students coming out of high school in those years stayed away in droves.
"Our industry came to a dead stop," said Michele Lamarsh, instructional program manager for the trades program at Florida State College at Jacksonville. "Everyone decided, 'I'm not going to get into the construction industry.' They figured it was never going to come back."
Those who could do things like remodeling turned to those sorts of jobs during the downturn, industry studies show, but those doing jobs like framing left the business altogether.
"The labor-intensive trades — drywallers, framers, some of the masons — during the downturn, a lot left the industry," Zona said. "When the residential market came back, a lot of the skilled or semi-skilled craftsmen went back to residential and shied away from commercial," since residential work tends to require less travel.
No training
That's where training the next generation of workers comes in — although doing so isn't as easy as it might seem.
"We've essentially dismantled what used to be known as vocational training," said Brian Turmail, spokesman for the Associated General Contractors. "Construction isn't even talked about as a track that students would pursue."
And those who do pursue it are looking at more indoor work, more technical jobs.
"The interest levels are not as good as we would like," Downing said, particularly in things like framing. Electrical, plumbing and heating, ventilation and air conditioning programs attract more students.
"When you start out, it is physical hard work," he said. "It can be a good career, but it's tough work."
For students who aren't afraid of the hard work, FSCJ's Lamarsh said the school also shows them that there's more to the job than just brawn.
"One of the things that pulls a lot of these kids in is the hands-on nature of it," she said, "but you still need the math skills."
And with technology playing a larger role in things like project management, workers in the building industry today are "as likely to hold an iPad as you are to hold a hammer," Turmail said. "It's a career that requires a lot of math and science skills."
Tapping the brakes
So where does the industry go from here?
For the moment, the workforce crunch has eased up slightly: In the same way that the booming of the industry has been twinned with the challenge of finding workers to do the jobs, the gray cloud of a slight dip in projects has the silver lining of making workers easier to find.
After that July peak in housing starts, for instance, the seasonally adjusted annual rate fell to 956,000 in August.
"We're getting little pauses right now," Downing said, "little taps of the brakes."
Zona, for one, has a note of surprise in his voice when he mentions that, recently, he had no trouble finding four crews to handle some punch-list items on a big project.
"Seven years ago, it was simple: You could get as much labor as you needed, pay whatever we wanted to," he said. "Then it was real difficult to get people. I'm going to follow the trend and see what happens."
As for the future, said Zona — whose company was one of the fastest-growing in the state in the past three years — he'd encourage more people to get into the business.
"I came up through the field," he said. "I did foundations, I did framing, I worked my way up through the ranks. Now I'm running a $40 million-a-year construction company.
"There's still opportunity in the world."