Construction companies struggle to find enough skilled workers

Low wages and exodus after housing crash are taking their toll

By John Hielscher john.hielscher@heraldtribune.com

Home building is back in Southwest Florida, and so are thousands of new construction jobs.

But some residential builders say they continue to have trouble finding construction workers for their job sites - and the demand for those workers is expected to keep growing.

"It's a huge daily challenge, no question about it," said Michael Storey, president of Neal Communities, the region's largest locally based home builder. "And it's not only a quantity issue, it's a quality issue as well. Finding skilled workers makes the equation even more difficult."

The subcontractors who perform most of the labor at constructions sites - from carpenters to plumbers to drywall installers - have reported labor shortages for some time. One report said 80 percent of the nation's builders have labor woes, and more are seeing delays as they wait for crews to get to jobs.

Construction Employment in Sarasota-Manatee

May 2004; 26,100;

May 2005; 28,900;

May 2006; 32,200;

May 2007; 28,500;

May 2008; 22,000;

May 2009; 17,000;

May 2010; 15,200;

May 2011; 14,900;

May 2012: 15,300;

May 2013; 16,400;

May 2014; 18,700;

May 2015; 20,100;

May 2016; 21,100;

Source: U.S. Bureau of Labor Statistics, Current Employment Statistics Program.

Florida wage data

Average annual wages for construction specialty trade contractors:

Construction laborers; $27,680;

Drywall and ceiling tile installers; $30,400;

Paving, surfacing and tamping equipment operators; $30,710;

Painters, construction and maintenance; $31,000;

Tile and marble setters; $31,460;

Roofers; $31,760;

Insulation workers, floor, ceiling and wall; $32,930;

Brickmasons and blockmasons; $34,060;

Plasterers and stucco masons; $34,200;

Cement masons and concrete finishers; $34,570;

Glaziers; $34,990;

Carpenters; $35,240;

Operating engineers, other construction equipment operators; $36,500;

Plumbers, Pipefitters and steamfitters; $38,820;

Electricians; $40,650;

Pipelayers; $40,870;

First-line supervisors; $54,490;

Source: Occupational Employment Statistics, Bureau of Labor Statistics, 2015.

"It's very difficult to find labor right now," said Jon Mast, CEO of the Manatee-Sarasota Building Industry Association. "It's a big problem."

At Neal Communities, which sold 989 new homes in 2015, production time has increased for the past three years.

"It's at a 10 to 15 percent increase on the cycle, from the time we start a home to the day we complete it," Storey said.

Demand forecast to rise 40%

Demand for residential construction workers in Florida is projected to jump 40 percent - or 66,000 employees - from 2014 through the end of this year, according to new estimates from the National Association of Home Builders. Only three other states expect a larger increase.

The construction sector in Sarasota-Manatee added 1,000 jobs in May over last year, a 5 percent growth rate that was the third-largest increase in that sector statewide.

A total of 21,100 workers were counted in the two counties' construction industry, the highest May total in eight years. But that is still nearly one-third off its peak. The construction workforce hit 32,200 in May 2006 and plunged to 14,900 in 2011.

Steady work helps

Luxury custom home builder John Cannon said by having a steady stream of homes under construction, he has been able to provide steady work for his subcontractors.

"There might be plenty of framers available, but when you can contract with a really good framer, provide him steady work and pay him on time, they want to work for you," said Cannon, president of the company that bears his name. "If you're a smaller/boutique builder, you are forced to hire someone with limited experience who won't provide quality workmanship.

"For our subcontractors, it's a challenge to hire good, qualified workers. During the downturn, many construction workers moved out of the area, retired or changed careers, and today's workers, new to the construction industry, are younger and don't always have the passion for perfection nor the work ethic of some of the older, more experienced workers," he said.

Many workers left Florida during the recession to seek jobs in other states that were not as damaged by the real estate downturn, and it's been hard to bring them back. A number of laborers were immigrants who returned to their home countries and decided not to return. Others found jobs in oil-boom states or just turned to other occupations.

Lower wages

One problem could be wages, which are often lower in Florida for many types of work than in other states.

According to the Bureau of Labor Statistics, carpenters in Florida earn an average $35,240 a year, compared with the $46,780 U.S. average. Drywall and ceiling-tile installers are paid an average $30,400 in Florida, versus $46,760 nationwide. The average annual wage for glaziers is $34,990 in Florida, and $45,421 across the country.

And labor prices are rising because of tight demand, and Mast and others say that will inevitably increase the cost of new homes.

Permits rise 65%

Despite the workforce issues, home construction is still roaring in Sarasota-Manatee. Through April, a total of 2,808 permits for single-family homes and multi-family units had been issued, 65 percent ahead of last year's pace. Nearly 7,150 residential permits were pulled in the two counties in all of 2015.

In Charlotte County, permits for residential construction have climbed 58 percent so far this year.

Statewide, residential building is 9 percent ahead of last year.

In Florida, construction employment in June rose by 25,000 jobs, or 5.9 percent, over the year, according to the Associated General Contractors of America. Nationwide, it remained steady after two months of declines.

"Construction demand is still growing strongly in all regions and among many types of owners," said Ken Simonson, chief economist for the association. "But contractors appear to be struggling to fill jobs in the short run."

He noted that recent data showed a spike in job openings at construction firms and a huge decline in the number of experienced construction workers available for hire.

Rob Dietz, chief economist for the National Association of Homebuilders, says labor shortages are a top constraint for new construction. The number of unfilled positions in residential construction has matched the high from 2006, he said, but homebuilding activity is still nowhere near the boom-time peaks.

The median age of a construction worker in Florida is 45, and as the industry's workforce ages, Dietz said, builders are struggling to attract new workers. That is especially true of such skills as framing, plumbing and electricial work.

Mast says a study showed that 60 percent of the construction workforce will be retiring in five years.

"We have to gain those bodies back," he said. "But it's not going to happen in five years. It will take 10 years."

Neal Communities' Storey believes some high school students can't afford the local training programs to learn a trade. Others simply don't see the construction industry as a career.

"We have to do a better job of conveying to these prospects that it is still a noble profession to be a plumber or an electrician or a carpenter," he said. "I think we've lost that."

Attracting workers

Neal Communities is beginning to research how to attract more young workers into the construction trades. "If college is not the path you're on, there are great opportunities over here," Storey said.

The local Building Industry Association formed a partnership with Suncoast Technical College to work on the workforce shortfalls. Students in 12th grade who are not college bound are often candidates for the construction-trade courses taught at the college, Mast says, but it may be time to start talking with 9th graders about those options.

Sean Snaith, an economist at the University of Central Florida, said construction in the state has shown one of the strongest rebounds in the country.

"The construction sector was devastated by the bursting of the housing bubble, with the number of jobs destroyed coming in at just under 347,000," he said. "The construction sector endured dramatic swings in this business cycle, having gone from the worst to first when it comes to the rate of job growth in Florida.

"It is expected to remain one of the faster sectors for job growth among all industrial sectors in Florida's economy through the end of our 2019 forecast horizon," Snaith said.

But the director of UCF's Institute for Economic Competitiveness revised downward the sector's outlook in his latest quarterly forecast.

"Construction job growth is expected to decelerate over the short-run forecast horizon but will remain solid, even as housing starts growth decelerates," Snaith said. "Despite the deceleration in home construction growth, the still double-digit growth rates in housing starts in the near term will support construction job growth of 6.0 percent in 2016 and 4.5 percent in 2017, before easing to 3.2 percent in 2018 and 2.5 percent in 2019."

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