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Employment and New Construction Starts are on the Rise

Man vs. machine has long been an issue and it is raging on in the construction industry in 2017. The recession that plagued America between 2006 and 2011 had many skilled workforce laborers returning to school to learn a different trade or take a different job. When the economy regained its strength, those same laborers did not return to the construction sites- literally.

 

National construction employment added 11,000 seasonal jobs in may 2017, according to ABC, the Associated Builders and Contractors, Inc. However, ConstructionDive.com stated 40% of workers who were laid off during the recession found other areas of focus for employment. Adding to that disappointing statistic, budget cuts of skilled trades in schools left a hole in construction employment of skilled workers. In addition, the aging workforce of skilled laborers are creating a struggle for the construction industry to fill positions from skilled tradesmen to managerial positions. Firms seem to be feeling the emptiness, making for tedious schedules and higher product costs.

 

Also according to ABC, the construction industry unemployment rate, which fell over 2.1 % in May and now is in a little over a 5.3% decline. The unemployment rate is based on non-seasonal adjustments, so because of seasonal factors, the construction unemployment rate almost always plummets from March to May.

 

However, the paucity of skilled employees is not completely negative. According to Sue Klawans, senior vice president and director of operational excellence and planning at the Gilbane Building Company, “It {The lack of skilled workers for employment} presents an exciting opportunity for people with skills and capabilities but who have not traditionally had access to a well-paying job. This industry has a lot of them, in the trades and project management.”

 

In an interesting study of why young people are deciding against trades has more to do with the security of a future in technology rather than their averse ideas about labored work. The study from Pew Research Center found that it is not only the construction industry that is hit hard by lack of workforce; it is widespread. When researched, most workers craved stability. Middle-class workers, meaning a wage of $80,000 or below, placed a stable and secure income of importance over meaningful work. Young people are immersed with technology from toddlerhood, and are raised believing robots and technology are the “trades to know”. Technology growth is always expanding, and the construction industry is no exception. An increase in the laboring trades will bounce back as more schools update new equipment to teach technology in those trade areas.

 

New Commercial Construction

New commercial construction sites have been on the rise since 2016, according to a recent report from The Gordion Group. That is a positive statistic for contractors and skilled laborers alike. Healthcare sites seem to be the heavy hitters, while universities and religious facilities are tied for increased progress starting in January 2017, as stated by Jamie Morgan, author of Health Facilities Management. Scott Creekmore, director of core accounts for healthcare, cites spending for new hospital construction was projected to land at more than $7 billion in 2016 and steadily increase to more than $8 billion by 2020. Renovation, which Creekmore says accounts for more than half of construction projects from 2012 to the first quarter of 2016, is expected to grow as well. Hospitals and universities are requiring more technological updates and are acquiring purchased land for expansions. Although the updates are more on the renovation side of construction, technology necessitates “room to grow” which leads to new construction.

 

Because of this rise in new construction, many skilled laborers are needed. Since the recession several years ago, the demand of workers has increased and the supply has stayed low. There are many opportunities for skilled laborers because of the rise of the new construction sites in not only healthcare as prior mentioned, but in retail, distribution, and lodging.

 

Associated Builders and Contractors forecasted that nonresidential construction would grow by 7.4% across all industries in 2016, and that forecast was a direct hit. Further forecasting put the increase in nonresidential construction spending at 27% by 2022. Broken down by industry, the highest growth in construction spending is anticipated for manufacturing, lodging, and commercial offices.This is another positive advancement in new construction start up sites since the recession.

 

Whether the trend’s increase is because of the market explosion of e-commerce, necessitating the need for warehouse sites, or if it is because of technology’s advancement and need for improvement, the fact remains the same. New construction sites, commercial and residential, are projected to keep climbing until at least 2022, adding to the stability of the construction industry.

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