The Building Tradesman Newspaper

Friday, June 29, 2018

Michigan's boom is building - with fewer workers

By The Building Tradesman

Employment in Michigan's construction industry stumbled a bit with our extended winter weather this year, but for the most part it's been a case of ain't no stoppin' us now.

Michigan added a head count of 12,500 to its construction workforce from May 2017 to May 2018, a very healthy gain of 7.7 percent. And that ranks Michigan No. 4 among the states in percentage job gains, behind West Virginia (+11.1 percent), Arizona (+8.8 percent) and Georgia (+7.7 percent). Our state has consistently been in, or close to, the top 10 states in industry employment gains over the past two years, gaining about 22,000 workers during that time. 

And there's broader good news across the United States: only a handful of states have seen industry employment drop the past 12 months. And construction employment reached a record highs in May in Louisiana, Nebraska and Texas.

"It is heartening to see such widespread construction job gains," said AGC chief economist Ken Simonson. "However, unexpected, steep cost increases for many materials may force some contractors to lay off workers, while passing on price hikes will likely cause public agencies and private owners to delay or cancel projects."

Updated employment statistics were released June 15 by the Associated General Contractors of America, based on Bureau of Labor Statistics numbers. 

They showed that while Michigan is enjoying a healthy construction market, it is doing so with significantly fewer workers than at the most recent peak of employment. Since 1990, the high water mark for Michigan's construction employment took place in April 2000, when our state employed 214,200 workers. In the ensuing 18 years, the industry in Michigan has said goodbye to 39,000 jobs, a loss of 19 percent. 

That construction workforce loss of 19 percent from peak employment is about average among the states. But industry veterans in the building trades will remember that Michigan's construction slump was especially deep after peaking in 2000, starting years before the Great Recession hit in 2008. The numbers reveal that the vast majority of states over the past 28 years saw their peak employment come in 2006-2008, years after Michigan's, 

AGC officials had previously warned that a lack of workers in the pipeline would act as the major hindrance to growth in the industry. Now, they're pointing to rising costs of construction materials as a potential hindrance to growth, and warned that President Trump's threats to blow up trade agreements won't help matters.

"Construction employment in many parts of the country could be impacted as firms get caught in the crossfire of the looming trade war," said Stephen E. Sandherr, the AGC's chief executive officer.

The AGC cautioned that contractors will have a hard time passing on additional costs along to clients, leaving less money available to invest in new personnel or equipment.