Skilled labor shortage could cause 'serious problem' for construction industry within 18 months

GMCS Editorial:  Like a recent post on gregorymcs.blogspot.com, there are some very interesting parallels in this article as it relates to the Philadelphia marketplace. As many industry leaders have been predicting throughout the most recent economic downturn, the lack of incoming apprentices throughout the economic downturn will ultimately result in a skilled labor shortage impacting the entire commercial construction industry. While many, both union and merit shop contractors included,  confirm that  the increased shortage of available skilled labor is the biggest issue facing the industry at this time, one regional industry executive doesn’t believe that this is a concern and he is “confident there is enough union labor to support the anticipated increase in construction activity.” With that confidence, perceived excess capacity in the industry and 2015 collective bargaining just over the horizon, it should make for some interesting regional collective bargaining in 2015.

With billions of dollars of work on the table throughout the entire Mid-Atlantic region, this industry, both union and merit, must collaborate to address this growing concern. With the existing training centers, successful industry programs and funding solutions already in existence, there are innovative and unique solutions that can implemented that can benefit the entire industry.

Skilled labor shortage could cause 'serious problem' for construction industry within 18 months

The Baltimore-area construction industry is eyeing a shortage of electrical and mechanical workers, a growing concern given the region’s increase in new construction projects.

Labor shortages in skilled trades such as electrical and heating, ventilation and air conditioning — especially in the non-union construction sector — is not new. But as the number of projects entering the pipeline has grown, CohnReznick partner Ryan Henigan has been hearing his clients express alarm about whether enough electricians and mechanical workers can be found to get jobs done on time.

“It’s been an old issue, but it’s not as much of an issue when you don’t have as much work,” said Henigan, who heads up CohnReznick’s local construction practice. “Our clients are seeing a sharp uptick in the work coming online. So it’s going from a topic that’s being discussed to becoming a serious problem in the next 18 months.”

According to data from McGraw Hill Construction, total construction contracts awarded in 2013 increased 40 percent over 2012, with $10.9 billion in work awarded in Maryland.

So far, the skilled labor shortage has meant contracting and construction management firms such as Morgan-Keller Inc. have to keep a close eye on how quickly electrical and mechanical subcontractors are completing work. Those sectors are most likely to fall behind because of a lack of highly skilled workers, especially as environmentally friendly mechanical systems often require technical expertise, said Jerry Bowman, an executive vice president at Morgan-Keller.

“If a trade is trying to get the work done with less-than-qualified people, we find they fall behind schedule and what’s being done in the field isn’t being done properly,” Bowman said.

Some of the shortage is tied to the loss of skilled workers who left the industry to pursue other jobs, said Robert M. Aydukovic, the executive director of the Maryland Center for Construction Education and Innovation. But it has also been difficult to recruit new workers to enter the field, meaning there are fewer new workers to replace the old ones.

“In 2008, 2009 and 2010, anyone with two brain cells to rub together would not say ‘Why don’t you go work in construction?’” Aydukovic said. “It was tough to watch the news or talk to parents about guidance counselors” about why high school students should go into construction.

The peak number of 5,161 students who enrolled in construction-related programs in the state in 2009 fell to 4,217 last year, Aydukovic said, a nearly 20 percent drop.

The shortage is not being felt among unionized electrical and mechanical trades, said Rod Easter, the president of the Baltimore Building and Construction Trades Council.

“We have people ready and we can send them right away,” Easter said.

But Aydukovic said that not all companies are willing to use union labor because of the expense, even though he acknowledged there is a debate over whether union or non-union labor is more efficient.

“Both are excellently trained and imminently capable tradesmen,” Aydukovic said. “The union guys tend to be a little more expensive but they say their productivity is better. So in light of that, what’s happened in the construction world is that anything you say is more expensive gets put on the back-burner.”

Source: Baltimore Business Journal