Shortage of Construction Workers Projected as Veteran ‘Boomers’ Begin Retiring

Posted By Mike Padgett

April 20, 2009

TEMPE, Ariz. – The nation’s construction industry workforce of more than 11 million is one of the nation’s largest, but there is concern that the numbers and collective brainpower of the blue-collar workers could begin fading.

Reports about decreasing numbers of construction workers are updated regularly on the Internet. The projections are based largely on the physical demands of the work and the approaching retirement of the oldest of the baby boomer generation, the nation’s largest “age wave” in history. The boomers were born between 1946-64. The oldest members of this generation reach their retirement age of 66 in 2012.

When the U.S. economy starts recovering – and experts believe it could begin in mid- or late 2009 – there is concern the economy’s rebound will be affected by the construction industry’s shrinking workforce, says J. Doug Pruitt, chairman and chief executive officer of Arizona-based Sundt Construction Inc. In March, Pruitt became the new president of the Associated General Contractors of America.

“We’re losing our workforce,” Pruitt says. “Guys like me are retiring. Young people aren’t coming in to it. We’re not graduating people from high schools with those skills like we did 40 years ago.”

Pruitt has been with Sundt for about 43 years. He cites projections showing the ranks of blue-collar workers decreasing because workers in skilled crafts are retiring faster than young workers are showing up to replace them. Pruitt says the shortage in a variety of careers, such as welders, pipefitters, electrical, plumbing, carpentry, and heating, ventilation and air conditioning, or HVAC, is expected to continue for the next decade.

Finding answers to the labor shortage conundrum is high on Pruitt’s priority list. He and other AGC officers took office March 19 at the organization’s annual conference in San Diego. (Pruitt’s speech is available at www.agc.org. To go directly to the video, type Pruitt’s name in the “search” box on the home page.)

In his speech, Pruitt said the theme of his presidency is “Dare to Challenge, Dare to Change,” referring to proposals to the industry to adopt more high-tech policies and procedures.

In its October 2008 strategic plan, the Construction Industry Institute reported that the numbers of qualified construction workers are insufficient “to replenish the aging workforce that has begun to retire.” The CII study says the trend “has differing levels of impact for different trades and is especially severe in trades requiring more training such as plumbing, electrical, and carpentry,” with similar shortages predicted in iron work, masonry and concrete.

The CII also reported that construction organizations “have a great deal of experienced individuals who are over 55 years old, but they are replenishing their ranks with those who are 35 years and younger.”

The Construction Labor Research Council estimates that each year, for the next decade, the construction industry will need 95,000 replacement workers and another 90,000 new workers. A study by the AGC shows that the average age of construction craft workers was 33 in 1988, 37 in 1997 and 38 in 2003.

In March, according to AGC Chief Economist Kenneth, construction employment fell in 49 states, compared to a year earlier. States with the largest decreases were Arizona, 28 percent; Connecticut, 22 percent; Florida, 21 percent; Oregon, North Carolina and Vermont, 19 percent each; and California, Minnesota, Nevada and Utah, 18 percent each. The only state with a gain in March was Louisiana, up 5 percent from a year earlier, and due mostly to repair work from hurricanes and floods.

As the economy drifted into the slow lane in recent years, some laid-off construction workers – because of the work’s physical demands, the lack of job security, or both – left the industry for other employment. They may choose to stay in their new jobs and ignore their former construction occupations when the economy rebounds.

Other challenges reducing the ranks of blue-collar workers include declining numbers of students entering construction management classes at universities; and tighter immigration laws that are reducing the pool of foreign workers.

Some companies are partnering with high schools to start programs focused on construction as careers. Those efforts are in response to high schools eliminating vocational education programs and the decreasing numbers of high school students graduating with skills needed for construction work.

Shortages of any kind – food, fuel, clothing or workers – trigger a falling-domino effect that leads to higher costs. A shrinking workforce translates into a brain drain. That lack of experience leads to concerns about safety issues and the quality of workmanship. All of which means paying higher wages to attract and keep workers. And higher wages boost the projects’ costs, which will be passed on to consumers and taxpayers.

Pruitt has been with Sundt for more than four decades, so he counts himself among the industry’s next wave of retirees. His plan is to hand the company mantle to President Dave Crawford, who also has been considering retirement.

The projected shortage, although not new, remains a major concern as sufficient skilled workers cannot be found to replace retiring workers, and as job applicants fail employment tests. Pruitt says high schools and families place too much emphasis on preparing students for college, and too little importance on vocational education, which prepares students for well-paying jobs in construction, auto mechanics, electronics and a host of other careers.

Throughout the industry, officials say construction workers willing to follow the work can earn hourly rates of $30 or more, and without student loans from college.

One of the key issues in the labor shortage in the U.S. construction industry is the role of foreign workers. In 2007, the Pew Hispanic Center released statistics showing that of the nearly 11.8 million construction workers in the U.S., about 2.9 million were Hispanic. Of the 2.9 million, “2.2 million were foreign-born and about 847,000 of that group were recent arrivals – many of whom were unauthorized,” according to an April 2008 news report in Construction Today magazine.

Projections about the decline in future workers sparks discussions about hiring more immigrants, “and we’re trying to build fences and send them home, and we’re going to need them,” Pruitt says.

Pruitt adds that the construction industry is regularly overlooked as an important option, as well as a rewarding career, for students who may lack the interests or finances to go to college.

“You don’t do anything in your life that doesn’t involve us, in some way,” Pruitt says. “When you drive somewhere, ride somewhere, fly out of somewhere, get up in the morning and turn the water on, flip the switch and the lights come on – all of that ultimately was put there by our industry.”

Sundt Construction is a diversified company with public and private clients across the United States. It has offices in Tempe and Tucson, Ariz.; San Diego, Sacramento and Novato, Calif.; Reno, Nev.; and Dallas, Texas.

Sundt’s major projects in Arizona in recent years include:

• The Walter Cronkite School of Journalism and Mass Communications at Central Avenue and Fillmore Street in downtown Phoenix. The architect of record was HDR Inc., and Steven Ehrlich Architects was the design architect.

• The METRO Light Rail system in Phoenix, Tempe and Mesa. Sundt’s joint venture partner was Stacy and Witbeck Inc. of Alameda, Calif.

• The new Dial/Henkel headquarters and research and development facility at Scottsdale Road and Loop 101. It was designed by Will Bruder + Partners in Phoenix.

• A six-mile stretch of Interstate 10 through downtown Tucson. Sundt’s joint venture partner is Kiewit Western. The project is called the largest undertaken by the Arizona Department of Transportation.

• Arizona State University’s BioDesign Institute, Buildings A and B. Sundt and DPR Construction were the contractors. The architects were Gould Evans in Phoenix and Lord, Aeck & Sargent in Atlanta.

 

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Apr 20th, 2009

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