by Sandy Griffis, Executive Director, Yavapai County Contractors Association
Readers of our column know me all too well, as well as my belief there is much to love about the construction industry. It is difficult for me to stop “gushing” about construction.
We all know the labor market is a serious concern and our unemployment rate is just 3.9 percent, and the volume of job openings in the economy at 6.8 million is higher than the number of people unemployed. I have never seen numbers like this, and with the labor market being so tight many of our local contractors are having staffing issues and worry about finding workers.
As we indicated a few publications ago, for those companies that have the right-sized labor force, many of the manufacturers serving them are having difficulties and hitches in manufacturing their products such as pavers, pipes, windows and doors, and the list goes on due to the labor force. So, the slowdown goes down the line and the contractors and consumers are delayed.
Even landscapers are having production problems because plants cannot be seeded and grown fast enough. There seems to be bottlenecks everywhere one looks, so the industry and everyone connected seems crotchety and cantankerous because work and projects cannot be churned out fast enough.
The construction industry is booming, and experts expect growth to continue. The Bureau of Labor Statistics projects the construction industry to be one of the fastest growing industries into 2020.
On the positive side, with increased work, the construction industry will have a higher employment rate than the overall economy. Construction has a 4.5 percent projected growth rate over the next several years, making construction staffing the leading industry in wage and employment growth. There is good money to be had in the industry.
The U.S. population is expected to grow from 321.2 billion to 338 billion. This increase of people results in a rise of residential housing, as well as schools, hospitals, infrastructure and everything else associated with population growth. This will escalate residential construction to the top of the growing-markets list.
I read the government plans to raise the budget by 1.9 percent to support home ownership, sustainable community and housing developments. This also provides access to affordable housing for homeless and vulnerable families.
Commercial construction will also continue to grow. With more consumer spending and governmental investments in tourism, office buildings and retail space, commercial construction businesses will reap the rewards.
One can say there are numerous moving parts to the construction industry. Shortages of available and qualified construction workers will continue to become more severe in most parts of the country as demand for new projects grows.
These shortages are prompting many firms to increase pay and benefits to retain and recruit from a relatively small pool of labor, which is good news for workers.
However, the labor shortage is also prompting firms to slow schedules, increase the cost of construction and rethink bidding on projects. Rising construction costs, longer completion times and fewer choices of contractors all pose significant risks to homebuyers and renters, private nonresidential developments, and infrastructure and public-building projects. In other words, construction workforce shortages pose a threat not only to the industry but to the broader economy.
Solving the chronic workforce shortages plaguing the construction industry will require active support from all levels of government, construction companies and organizations like YCCA. We need to rebuild our once-robust pipeline for recruiting and preparing the next generation of construction workers. While the challenge ahead remains difficult, this is a problem that can be solved with a lot of hard work.
Skill is dying in the industry. Trade schools are no longer operating and supplying companies with qualified workers. YCCA is so proud of our YCCA Workforce Bootcamp to grow workers from within our community. YCCA developed and established an in-house boot camp for training, and what a success it was.
Twenty-eight young adults participated, and many job opportunities were offered to the students. The intent of the boot camp was to counter the misconceptions that have stigmatized construction careers, despite the fact the economics of working in the industry is substantially more advantageous than in many other industries.
There are many career paths one can take in the construction industry. We now have in place with our initial boot camp a training program to place young adults in an industry field where there is growth.
YCCA spent quite a bit of time, money and resources in developing our boot camp and is so proud of the outcome. We now have a program in place to develop talent and priorities of positioning and put greater emphasis on skills-based education for our young adults.