The Building Tradesman Newspaper

Friday, August 10, 2018

Survey points to dynamic industry, nagging concerns about worker shortages

By The Building Tradesman

Optimism about future job opportunities and market growth in 2018 and beyond remains high among union contractors, labor representatives and owner-clients - but at the same time, many remain concerned about a growing shortage of union craft workers.

Those are key findings from the fourth annual Union Craft Labor Supply Study, released last month by The Association of Union Constructors (TAUC) in conjunction with the Construction Labor Research Council (CLRC). It is designed to give construction professionals an in-depth understanding of the current state of union labor supply in the construction and maintenance industry throughout the United States.

TAUC and CLRC utilized a rigorous methodology to analyze nearly 750 responses to a multi-question survey sent earlier this year to a cross-section of contractors, union representatives and owner-clients. The East North Central Region, which includes Michigan, had the highest percentage of responding contractors in the nation (29 percent). "The large sample size and carefully worded questions combine to make this one of the most useful labor supply reports available, and the only union-specific study focusing on construction and maintenance," the TAUC said. 

Following are some highlights of the findings:

*Union/labor representatives and contractors were the most optimistic about growth, although the positive predictions were broad-based. Contractor association, construction manager, contractor/subcontractor, owner/client and labor union representative categories all were overwhelmingly confident (+60 percent) of industry growth.

"The vast majority of people expecting growth in construction and maintenance opportunities said it would last two to three years," the TAUC said. "Most of the remainder thought it would last longer, 
four to five years or even more than five years."

*Over the past three years, projections for "very strong growth" have grown, strongly. In 2016, 17 percent of respondents predicted very strong growth, that level grew to 21 percent last year and 24 percent this year.

* The two regions that had strong and increasing projections of growth were the South Central and Southwest. But the East North Central Region (which includes Michigan) wasn't far behind, with about 80 percent of respondents expecting growth or strong growth, similar to last year's survey.

*There's a growing shortage of union craft workers. More respondents in the study reported that union craft worker shortages in their organization in 2017 were greater than in previous years. The survey "shows that more and more people who are familiar with the union construction and maintenance industry are reporting a union craft labor shortage, and the degree of that shortage is growing," the TAUC said. "To illustrate, in 2015, 52 percent reported a shortage in their organization; two years later this had grown to 67 percent."

*Only 17 percent of respondents reported a "large" worker shortage, however. The TAUC added, "although a union craft labor shortage is prevalent, the vast majority of those with a shortage said it was a small shortage. Moreover, many also reported a surplus or the right number of workers in their organization." About 65 percent of the respondents in the East North Central region reported craft shortages, up about 7 points from 2016.

*"Very generally speaking, the larger the organization, the more likely it is to experience a shortage of union craft workers,"  the TAUC said. 

*Nationwide, crafts with the greatest number of shortages last year were the Electricians, Carpenters & Millwrights, Plumbers and Pipe Fitters and Iron Workers. However, there wasn't a tremendous disparity: reported shortages among all the crafts (with the exception of the less-in-demand Teamsters), ranged between 40-70 percent.

*Conversely, projections of a surplus of workers for this year was almost uniformly in the 10 percent range among all the crafts, except for the Teamsters, which was about double that.

*Some random tidbits: "Not only did electrician apprentices "have the largest shortage in 2017, they also had one of the biggest increases in their shortage from 2016 to 2017," the survey said. 

The individual skill in the highest demand: welders, were sought by 32 percent. All other highly sought skill set descriptions (electrician, pipe fitter, iron worker, etc.) are in the single digits. 

*Participants in the study were asked if there was a measurable absenteeism rate in their organization. The survey found 65 percent said “no” and 35 percent said “yes.” The most common absentee rate was 6-10 percent.