Cautious optimism as construction industry booms

Posted at 3:49 PM, Dec 02, 2014
and last updated 2014-12-02 15:48:59-05

GRAND RAPIDS, Mich. - The construction industry is booming in the United States, due in part to a continually recovering economy.

While companies themselves are growing, the trade group that oversees the commercial construction industry says more needs to be done to ensure long-term success.

While Grand Rapids is ahead of the curve when it comes to construction hiring across the country, industry officials are cautiously optimistic about what the future holds.

“The Associated General Contractors of America is announcing this morning that Grand Rapids had a 12 percent increase in construction employment from October 2013 to October 2014,” said Ken Simonson, the chief economist for the AGCA.

That puts Grand Rapids in the top 10 percent of all metro areas in the United States for increased construction employment.

construction picAccording to the AGCA, the Grand Rapids metro area added 1,200 new construction jobs between Oct. 2013and Oct. 2014. The AGCA says there are now 17,400 people working in construction in the Grand Rapids area compared to 13,400 four years ago.

However, it comes after 2.3 million people were laid off across the country.

“The construction industry – nationwide - lost 30 percent of its workforce from 2006 to 2011,” Simonson said.

There are still plenty of jobs that need to be filled and the AGCA is optimistic higher wages will draw workers back into the field.

“Construction last year paid 15 percent more in Michigan than the all industry average,” said Simonson. “Construction workers averaged $53,600 in 2013.”

That puts construction jobs among the highest-paying, non-college occupations.

“Some will come back from retirement, although that’s not a long-term solution,” explained Simonson. “Some will come from jobs that they took - not out of preference - but because there was nothing in construction for so long.”

A recent survey by the AGCA of 1,000 contractors revealed that 83 percent of those questioned said they were having trouble filling craft positions, which includes carpenters, roofers and plumbers.

“These shortages have the potential to undermine broader economic growth by needlessly delaying and inflating the cost of construction and development,” Simonson said.

But that’s not all.

Contractors also say they are also having trouble filling project manager and supervisor positions.

“The sad fact is the country has spent the last three decades dismantling what was once a robust career in technical education programs across the country,” Simonson said. “It is essential to make significant reforms to a host of federal programs that are ostensibly designed to support career in technical education.”

In an effort to plan for the future, the AGCA is calling on government to take action, including comprehensive immigration reform.

“To get specialized kinds of projects done, it’s important contractors be able to bring in workers who have the right skills from abroad,” said Simonson. “Historically, that’s been a way construction and other industries – particularly high-tech industries – have been able to grow and create more jobs for Americans.”

In addition to immigration reform, the AGCA would like to see Congress reform the Perkins Career and Technical Education Act, which “funds vocational education programs to give states more flexibility and autonomy.” The group would like to see more resources dedicated to career and technical training.

The AGCA also believes states should be provided more financial resources and allowed more flexibility in how that money is used.

“They should also make it easier for school leaders to establish career academies and other skills-based programs to attract students who may not stay in a traditional academic program,” Simonson explained.

The AGCA would also like to see businesses create charter schools that provide technical skills training for students who may not be college bound.