With home-building and commercial building activity finally picking up, the construction industry’s next big challenge will not be a lack of demand but rather a lack of skilled craft professionals and construction supervisors.
The Great Recession hit the construction industry particularly hard, as many projects throughout the U.S. came to a virtual halt, having been canceled or put on hold after the economic crisis hit. Yet construction tends to rise in good times and fall in bad stretches, and many building projects that were put on hold have since come back online. Construction of all types, including commercial, are on the rebound.
Last year, about $885.1 billion in new U.S. construction projects were put in place, up from $789.7 the previous year. According to the U.S. Census Bureau’s latest monthly findings, construction spending during the first six months of this year amounted to $408.5 billion, 5.1 percent above the $388.8 billion for the same period in 2012.
The upswing in construction activity exacerbates the shortage of available labor and talent, according to Brian Turmail, a spokesman for the Associated General Contractors of America (AGC). The AGC is a trade group that represents nearly 30,000 leading firms in the U.S. construction industry, including general contractors, specialty contractors, and service providers and suppliers.
“Our members want more work, but then they worry that there aren’t enough skilled workers to perform all that work,” Turmail told IMT Career Journal. “There just aren’t a lot of folks sitting by the phone waiting to be called back to work.”
An estimated 20 percent of all jobs lost during the recession were construction jobs. Many of the construction workers who lost jobs during the downturn have moved on, either retiring or transitioning into other professional fields, like energy or trucking. Although the industry historically has survived cyclical economic ups and downs, construction firms often cannot bring back lost workers who secured employment in other industries.
As a result, many construction firms today report difficulties in attaining workers with the right skills.
“Firms are clearly worried about, and in many cases already experiencing, a shortage of skilled craft workers — especially equipment operators, carpenters, and laborers,” Turmail said. “Many of our members have reported having a harder time finding and recruiting not just skilled craft workers, but also skilled managers, including estimators and project supervisors.”
Yet, as Turmail sees it, the skills shortage has less to do with a skills mismatch than systemic deficiencies in the national education pipeline, namely the lack of a nationwide network of early schooling at the K-12 level and skills-based vocational programs. “Combined with a significant decline in union participation in construction and the apprenticeship programs they operate, we basically have no national system in place for training new construction workers,” he said.
As defined by the Occupational Information Network (O*NET), the core job knowledge domains in the construction industry include knowledge of materials, methods, and tools involved in the construction and repair of houses, buildings, and other structures like highways and roads. Today, building information modeling, mobile computing, and other technological advancements are quickly changing how construction work will be conducted over the next decade, and incoming workers will be required to have these technological skills.
As a result, many construction jobs require workers with specialized technical training and education beyond the high school level — from design to building completion.
Compounding the problem is that the construction industry — like the U.S. manufacturing sector as a whole — faces an image problem. In a recent survey, high school students rated construction 248th out of 250 occupation choices.
“Despite the fact that construction workers earn more on average than the broader U.S. workforce, there is a stigma that comes with construction that doesn’t seem to apply to lower-paying menial office and service-sector jobs,” Turmail said. “Five years, and 2 million lost jobs, of one of the most significant construction downturns any of us have ever known certainly hasn’t helped make careers in construction seem more glamorous.”
The AGC is, therefore, using creative strategies to attract younger workers and replenish the longer-term labor force in the industry.
“First, we want to engage younger children so they can have a greater opportunity to learn about careers in construction and prepare for those careers by taking the kind of math, science, and skills-based classes that are essential to becoming a skilled craft worker,” Turmail said. “And second, we have found that many students tend to be more successful at learning math and science when it is taught in real-world settings — like a construction project — than if they learn them in a classroom setting.”
In the most recent data available, in 2012 an estimated 5.64 million Americans were employed in the construction industry, up from the previous year but down significantly from a peak of 7.6 million in 2007. Today, construction job data point to rising — albeit spotty — employment gains in construction.
Between June 2012 and June 2013, 36 states added construction jobs, marking the largest number of states to post year-over-year gains since May 2012. According to an analysis of federal employment data released by the AGC in mid-July, Wyoming’s 12-month percentage increase led the nation (10.4 percent), closely followed by Louisiana (9.7 percent) and Arizona (9.7 percent). In terms of sheer job numbers, California added the most construction jobs (32,200), followed by Texas (31,400) and Louisiana and Florida (each 12,200 jobs).
Meanwhile, among the 14 states with construction job losses between June 2012 and June 2013, South Dakota lost the highest percentage (6.2 percent), followed by Kentucky (5.2 percent), and Indiana (5.1 percent). Indiana had the largest number of construction jobs lost (6,400 jobs), followed by Ohio (3,900 jobs) and Kentucky and Pennsylvania (each 3,500 jobs).
In June, the unemployment rate for construction workers fell below double digits for the first time since 2008, as every segment of the industry added employees.
While growth in construction employment has been slow and geographically split, Ken Simonson, the AGC’s chief economist, forecasts the industry will ultimately add between 300,000 and 350,000 new jobs in 2013 and even more new jobs in 2014.