Labor Issues Cloud An Otherwise Sunny Horizon for Many Regional Subcontractors
Most specialty firms see good things ahead for the region in 2015, but availability of labor and an aging workforce remain the industry’s most critical issues.
“We’re seeing (construction) workers go to higher paying jobs in other states, like Texas and North Dakota, and to other industries, like oil and gas,” said Kelly Brough, CEO of the Denver Metro Chamber of Commerce, in a Dec. 8 outlook for Colorado hosted by the University of Colorado Leeds School of Business.
The business school says that labor costs could increase by 7% across all sectors due to shortages and competition. This labor squeeze is aggravated by an increasing demand for services from in-migration.
“Colorado has been adding population at double the national rate since the 2010 census,” says Ken Simonson, chief economist for the Associated General Contractors of America.
“The state ranks in the top five nationally for population growth,” says Richard Wobbekind with the Leeds School of Business.
The groups tasked with providing the industry’s skilled workforce are especially concerned.
“We certainly see improvement in the construction market as we head into 2015,” says Debra Scifo, executive director for the American Subcontractors Association of Colorado. “The one constant is that as an industry we are faced with a shrinking labor market.”
“The pulse in the current marketplace is energetic,” adds Marc Paolicelli, VP of corporate business development for RK Mechanical Inc. “But the largest obstacle in the construction industry is the availability of a qualified workforce.”
As a result associations have boosted training, certification and continuing education classes but are not keeping up with demand.
“At ABC Utah, we have strategically planned for a long-term craft developmental program to increase the number of skilled craftsmen in our state,” says Josh Van Orden, president of V.O. Brothers Mechanical and ABC Utah.