Tuesday, September 18, 2018
Business

Florida construction projects slowed by worker shortage. Problem could get worse.

Sean Ouellette noticed in late 2016 that construction workers were getting hard to find. Two years later, he calls it a "pretty significant crisis."

"We’re seeing a real shortage of available tradesmen," said Ouellette, vice president of operations for KAST Construction in Tampa, the firm behind many local projects including One St. Pete and the Hyatt Place hotel. "It’s grown into a serious issue that affects costs."

He and KAST are hardly alone.

Eight out of every 10 firms are having trouble finding enough skilled labor, according to a nationwide survey from the Associated General Contractors of America released Wednesday. Just as many expect hiring in the next 12 months to be as hard or even harder than the previous year.

The shortages span the trades, with pipelayers, sheet metal workers, carpenters, concrete workers, pipefitters and welders in particularly high demand.

Companies big and small are feeling the pinch.

RELATED: Florida’s construction employment still hasn’t recovered from Great Recession.

"Labor shortages in the construction industry remain significant and widespread," said Ken Simonson, chief economist for the Associated General Contractors of America, which surveyed more than 2,500 companies. "The best way to encourage continued economic growth, make it easier to rebuild aging infrastructure and place more young adults into high-paying careers is to address construction workforce shortages."

The market is just as tight in Florida, and will likely get tighter.

Eighty-two percent of the state’s firms expect to hire additional hourly workers in the next year, compared to 76 percent nationally. They also plan to hire significantly more office personnel than the national average, as well as more salaried workers.

The labor shortage has increased competition, with more than half of the Florida companies saying they are losing workers to other firms. They are also having a harder time finding adequately trained workers, the survey found.

The shortage comes even as construction employment remains below pre-Great Recession highs. Locally, construction jobs peaked in June 2006 at 95,300 before plunging to 50,100 in early 2011. Today they’ve rebounded to about 76,800, still 20 percent off the highs.

So why aren’t there enough workers? After the recession, many people in the construction trades switched to more stable industries, ones less susceptible to booms and busts.

Those that remained are aging, and the physical demands can make it hard to hang on for a few more years near the end of a career. A lot of workers retired in recent years, without enough replacements, especially from the millennial generation.

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The recent crackdown on undocumented workers, and more controls on legal immigration, also appears to have limited the pool of available workers. And construction struggles to shed a reputation for being dirty and dangerous, which only makes it tougher to attract workers when unemployment is so low, both in Florida and the nation.

"Every industry is out there competing for workers to a greater extent," Simonson said.

The labor shortage has prompted three-quarters of Florida firms to increase pay. They have also provided more bonuses and expanded benefits.

More than half have started or increased in-house training. Same goes for engaging in career-building programs with colleges and technical schools. They are also hiring more interns, paying more overtime, and a few have changed their hiring standards to entice workers to sign up.

Nearly 60 percent said they had increased the price of their bids to make up for higher labor costs. Projects are also taking longer than anticipated, which has prompted more than a quarter of the companies to include longer completion times in their bids.

Ouellette estimated that KAST’s labor costs have jumped 20 percent in the past year and a half. The shortage also puts a premium on good planning.

"We look a lot more carefully at how the availability of tradesmen could affect a project at various points along the way," he said. "That didn’t use to be a big issue."

Higher wages are just part of the pricing equation. Many new construction workers, whether they moved from another industry or just graduated high school, can’t get as much done as their experienced counterparts.

"They don’t have the same productivity as that 15- to 20-year (worker)," said Steve Malaney, who runs Oregon-based P&C Construction. "We are finding that our subcontractors are having to decrease production."

To help fill the labor gap, more companies in Florida and the nation are using drones, robots and 3-D printers. Others rely more on virtual construction tools like sophisticated modeling that allows them to reduce onsight work time.

"With a rise in the share of firms having trouble finding skilled craft workers, it’s evident that we need to reskill the future workforce," said Sarah Hodges, a senior director with software company Autodesk, a partner on the survey. "Technology can help bridge this gap."

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Contact Graham Brink at [email protected] Follow @GrahamBrink.

   
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