The Building Tradesman Newspaper

Friday, May 26, 2017

Worker shortage evident in strong construction industry

By Marty Mulcahy, Editor

1. Prospects for U.S. construction work opportunities are currently strong and should remain that way at least into next year.

2. The nation's construction industry has moved beyond the question of if there is a looming worker shortage. The reality is, while there are undoubtedly some exceptions, there is an overall worker shortage now, and it will likely extend into next year and beyond.

There are two key takeaways from the third annual Union Labor Supply Survey issued in May by The Association of Union Contractors (TAUC), a union contractor advocacy group.

The information was gleaned by a nationwide January 2017 questionnaire that queried a cross-section of union-related construction industry owners, contractors, contractor associations and labor representatives. A total of 791 people responded to The Association of Union Constructors survey, which commissioned the Construction Labor Research Council to conduct an analysis of the current state of the union construction and maintenance industry. This is the third year the study has been conducted.

"This is the only national, union-specific labor supply study focusing on construction and maintenance. The findings will help create a detailed, data-driven picture of the current state of the labor supply throughout the United States," the TAUC said. "TAUC launched the study in 2015 and received a tremendous response from a wide cross-section of the entire industry - contractors, labor representatives, owner-clients and construction association representatives completed the survey."

The TAUC said one factor that should "enhance the validity of the results" is that respondents were instructed to "describe their own experiences, not their perceptions of others' experiences or what they may have read or heard elsewhere."

The study's top key finding was that "strong and increasing growth" is projected for the organized U.S. construction industry. More than three-quarters of respondents (78 percent) project growth for 2017, up significantly from last year's 58 percent. The vast majority of respondents expected the growth to last over the next two to three years, and the remainder expected it to last four to five years.

Another key finding: "a growing shortage of union craft workers" is evident, with workforce deficits greater this year than last year. On average, 45 percent of respondents said there had been a union craft worker shortage in their organization in 2016 and 17 percent said there had been a surplus. For 2017, 49 percent  of the respondents said they expected a worker shortage, with nearly one-fifth of them expecting a "large shortage." On average, only 15 percent of respondents expect to see a craft personnel surplus in 2017.

The numbers, as always, have a big caveat. There are some trades, in some local unions in some jurisdictions in Michigan and elsewhere, that are not now up to full employment, and may not get there at all this year or next And their own demographics may not indicate they have an aging workforce and not enough apprentices. Still, the industry at large seems to be headed in the direction of worker shortages.

Some other findings in the survey:

*By craft, the Carpenters and Millwrights are in the greatest demand: 70 percent of respondents expect those crafts to have a personnel shortage or large shortage in 2017. Also near the top: the Roofers and Waterproofers, Boilermakers, Electricians, Plumbers and Pipe Fitters and Iron Workers are all in a range of about 60 percent where shortages or large shortages are anticipated this year.

*Even with crafts less in demand for workers, the shortages are significant. The Teamsters have a relatively small representation in the building trades, and their job prospects are lowest: they're about even weighing anticipated worker shortages and surpluses. Above the Teamsters, respondents put the Bricklayers and Allied Crafts, Painters and Allied Trades and Cement Masons all between 35-45 percent in terms of anticipated worker shortages.   

*Apprenticeship participation is becoming a key factor in workforce trends. In 2016, Carpenters, Electricians and Iron Workers were highest among the trades with reported apprentice shortages - all in excess of 50 percent.  The average among all the trades was 43 percent reporting a "shortage" or "large shortage" of apprentices in 2016, and the only crafts below that line were the Heat and Frost Insulators (40 percent), Plumbers and Pipe Fitters (33 percent) and Bricklayers and Allied Crafts (30 percent).

*While overall responses were measured from the entire organized construction industry, the TAUC said there were "very different perspectives" on the various topics covered, with union employees usually giving more optimistic responses to questionnaire items than those from the contractor community. For example, 70 percent of contractor respondents reported an observed labor shortage in 2016, compared to 48 percent of union respondents less inclined to see a shortage. In addition, 86 percent of union respondents see industry growth in 2017, vs. 70 percent among the contractors.

*How do you retain a construction workforce? No surprise here: Give 'em more hours - but not too many, and not too few. Respondents said the way to attract craft workers is to hire them for longer rather than shorter-term projects. Also, the study said "results show that 50-69 hours is optimal for organizations to achieve their craft labor staffing goals. Work weeks less than 40 hours, or longer than 80 hours, were the least desirable."

*What industry sectors have the most union employment? Respondents were asked to indicate the industry in which their organization performed the most union construction and maintenance work. Atop the list for 2016 was the commercial/institutional sector, with 43 percent of responses. Next were utility (20 percent) and manufacturing (16 percent). Nowhere to be found on the list, expect perhaps as part of "other," at 5 percent: homebuilding.