Construction firms are adding workers — where they can find them
By DENNIS GRUBAUGH
Construction employment is at its highest level since January 2009 and most firms predict they will add workers in 2016 — if they can find them.
Construction firms added 45,000 workers in December as the industry‘s unemployment rate declined to 7.5 percent from 8.3 percent one year before, according to an analysis by the Associated General Contractors of America. Association officials said most firms expect to expand their headcount in 2016 because of growing private and public sector demand.
“Based on what most contractors have reported, the robust hiring the industry has experienced during the past few months should continue through 2016,” said Ken Simonson, the association’s chief economist. “While contractors continue to be worried about labor shortages, regulatory burdens and health-care costs, most expect growing demand for many types of construction will allow them to expand this year.”
Labor shortages are worrisome closer to home as well.
Officials are scrambling to address some 1,500 job openings that are expected in manufacturing in Southwestern Illinois in the next five years, as well as another 1,200 jobs in the trades.
A campaign put together by the Madison-Bond and MidAmerica workforce development boards and the Leadership Council Southwestern Illinois Manufacturing Steering Committee is backed by some of the biggest employers in Metro East. The groups established a new website (www.wellpaid.info) and a toll-free phone number (844-well-paid) and are using informational brochures, speakers bureau, facilities tours and construction career expo to spread the word directly to students, parents, counselors and principals at high schools throughout Southwestern Illinois.
Meanwhile, national construction work looks plentiful. Employment totaled 6,538,000 in December, the most since January 2009, and is up by 263,000 jobs compared to a year ago, a 4.2 percent increase. Residential construction increased by 23,100 in December and by 137,200, or 5.7 percent, compared to a year ago. Nonresidential construction employers added 21,200 jobs for the month and 125,400 jobs compared to last December, a 3.2 percent increase.
Within the nonresidential construction sector, nonresidential specialty trade contractors added 11,300 employees in December and 95,300 for the year. Nonresidential building contractors added 5,100 jobs for the month and 9,900 jobs since December 2014. And heavy construction and civil engineering construction firms added 4,800 jobs in December and 20,200 jobs during the past year.
December marks the third month of large increases in construction employment, the economist noted. The growth in construction employment comes as 71 percent of firms report they plan to expand their total headcount in 2016, according to the association’s 2016 Construction Hiring and Business Outlook.
Association officials noted that most contractors remain concerned about shortages of available construction workers, noting that 70 percent of contractors report having a hard time finding workers. They urged federal, state and local officials to act on measures outlined in the association’s Workforce Development Plan to support new career and technical education programs. In particular, they called on Congress to enact needed reforms and increase funding for the Perkins Career and Technical Education Act.
“With the construction industry expanding at rates not seen since the downturn, public officials need to make sure we are encouraging and preparing students to consider high-paying careers in construction,” said Stephen E. Sandherr, the association‘s chief executive officer. “As our Outlook makes clear, the industry is likely to continue expanding this year, as long as there are enough workers available for firms to hire.”
Associated General Contractors spoke about the results of their survey during a teleconference in mid-January.
More than 1,500 construction firms participated in the AGC outlook survey, 410 of them from the Midwest segment.
Builders are most optimistic about the potential for growth in retail, warehouse and lodging, hospital, private office, multifamily residential, primary and higher education construction, and public building construction.
Last year, Simonson said, contractors were generally pessimistic about all private and public segments, including water, sewer, manufacturing, highways, other transportation, power and direct federal construction.
This year’s survey was done before year-end federal legislation authorizing increased highway spending.
While most builders will add to their ranks, the additions are likely to be small.
“In most cases that hiring will only lead to modest increases in the overall size of most firms,” Simonson said. “Sixty-three percent report their planned hiring will only increase their headcount by 1 and 25 percent.”
Their expansion plans appear less ambitious than they did in 2015, he said. Then, 80 percent of firms indicated they planned to increase the size of their workforce.
Some of the shortage of salaried and craft professionals is being rectified by increasing pay or benefits, Simonson said. Others companies are investing in training and development programs.
Two other, related developments are notable, he said. One is a general concern about safety as the result of bringing inexperienced workers to the job. The other is an uptick in investment in information technology to help firms do more with fewer people.
The concerns over shortages mirrors results of the previous year’s survey, he said.
Southern Illinois Builders exceeds project goals
The Southern Illinois Builders Association, based in O’Fallon, says it exceeded its project goals in the past year. Builders estimated only 1,066 new projects in 2015.
“I am pleased to report that the association had received 1,246 new projects for calendar year 2015, which is approximately 17 percent more new projects than anticipated,” said Donna Richter, chief executive officer of SIBA.
The total amount of the projects awarded in 2015 is in excess of $862.1 million. The projected goals for 2016 are to increase that project total by at least 5 percent, she said.
The Southern Illinois Builders Association is a trade association representing 500-plus commercial contractors, industrial construction companies; building contractors; highway construction companies; utility construction contractors, subcontractors, suppliers, and serviced oriented companies throughout the southern 39 counties in Illinois.