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Concern grows over construction work force.

Concern Grows Over Construction Work Force

The construction industry will offer the hottest job market of the next decade, according to construction experts across the country. With fewer young people entering the work force and more older workers retiring, the industry is going to need many more workers than will be available.

"We're going to need all the workers we can find and train," says Paul Emerick, past president of Associated General Contractors of America, the nation's oldest and largest construction trade association.

The construction industry nationally is projected to grow 1.2 percent per year through the middle of this decade, according to the Bureau of Labor Statistics. As the industry's need for craftspeople increases, however, the number of qualified workers will be decreasing. The Census Bureau projects that 12 million fewer people will enter the work force during the next 14 years.

These work-force shortages will have a significant effect on the construction industry and, in turn, on the overall economy, experts predict. A faltering construction industry would indirectly affect other industries. Without the necessary work force to repair and expand existing transportation, power, telephone and sewage systems, without new buildings for office and retail expansion, the growth of existing businesses and communities is stunted, they say.

"As the total supply of available workers declines, what may seem like a local problem now is going to turn into a national problem and productivity will suffer," Emerick says. "For those willing to learn and train, the job opportunities in this industry couldn't look better."

Some of the nation's leading construction executives concur. "The opportunities in construction will be far greater in the next 20 years than they have been since the 1950s," says James Giachino, director of human resources at the Barton-Malow Co. in Southfield, Mich. "With this country's commitment to rebuilding infrastructure, I anticipate a surge of building in the next decade that is going to require more skilled construction workers than ever before."

Jerry Cooper, vice president of HCB Contractors in Dallas, Tex., points out that new types of jobs are going to become available as the industry develops new technologies.

Not everyone agrees that a work force shortage is certain. Neal Fried, labor market economist with the Alaska Department of Labor, thinks a worker surplus is pending nationally in the short-term because of signs the country is entering a recession. "Construction, generally speaking, is the first to get hit," he points out.

However, he agrees that national demographics point to a possible worker shortage by the year 2000. "It can certainly be a good place for someone to get into out of high school. In the past it has provided good opportunities, generally speaking, over the long term."

Predicting what may happen in Alaska in the immediate future is difficult, he says. The number of construction workers in the state depends on several things, including what's going on here and elsewhere.

For instance, a construction boom in the 1980s peaked in '83, the number of workers reaching 20,700. Then the economy crashed; more than half the jobs disappeared and many workers left. "When our economy started coming back, (contractors) started feeling a real pinch in some of the trades," Fried explains. Last year the state had only 9,800 construction workers.

Fried is cautious about making predictions about a continuing labor pinch here. "I suspect by next year, there may not be quite that pinch. With the national economy softening up, I suspect people will head north looking for opportunities," particularly with the high prices oil is bringing now, Fried says. "It doesn't take a whole lot of contractors to head north to change the competitiveness of our market," he says.

The state labor department's construction forecast for Alaska in the year 2000, recognizing that construction is one of the most volatile and difficult industries to predict, paints two scenarios. One forecast shows construction employment growing slowly, reaching only 12,800 workers by the end of the decade. The other forecast predicts 14,750 workers by the year 2000, with a growth rate for the industry of about 2.5 percent. If the Arctic National Wildlife Refuge is opened to oil drilling or if a gas pipeline is built, then the scenario could be much different, Fried adds.

Even so, the robustness of the early '80s-when construction dominated the economy, growing 25 percent or greater some years and being responsible for almost 10 percent of all wages, salaries and employment - will be hard to repeat.

Local construction experts maintain that a work-force shortage, particularly over the long term, could send a shock through Alaska's construction market and the state's economy.

Currently, the construction market is tight, but as federal highway projects and additional mining projects get under way during the next 10 years, alaska could see serious problems arise from the lack of skilled workers, they predict.

"We need properly trained, professional workers that can handle the complex jobs of the next decade. Otherwise, many large projects on the drawing board will suffer," says Mike Swalling, president of Swalling Conntruction in Anchorage and of AGC of Alaska. "As the United States' overseas military force decreases and Alaska's strategic defense role increases, the demand for expanded military development becomes evident.

"Additionally, we cannot overlook the need to have a strong and well-trained labor force in position as ANWR and other natural resource development takes place."

Nationally, the AGC of America is studying the problem and formulating an industry-wide response. "Trained, qualified, motivated people are the basic ingredient of the construction industry," says Emerick. "Without them, the construction industry falters. And without adequate repair work and new construction, local economies and quality of life will suffer."

Swalling agrees: "However removed it may seem now, the work-force shortage is something that is going to affect all of us. The picture is going to be grim, unless the industry does something right now."

The AGC is trying to attract more people to construction, to keep them active in the industry longer and to develop more productive workers with greater skills. As women, minorities and immigrants play an increasingly important role in the work force, the construction industry will have to modify existing programs to attract and retain productive workers.

Says Roxanna Horschel of Acme Fence Co. in Anchorage, "The industry will have to do a better job of promoting construction careers. We need to explain that the work is not all seasonal; that the industry offers a wide range of occupations. It's a message we need to get out to kids early before they have formulated opinions about career options."

She adds, "We also need to impress upon legislators the need for state funding for training andre-training programs. As a whole, the business community must work closely without secondary and vo-tech education systems to make sure kids are graduating with the skills that will adequately equip them for their chosen career."

Swalling says cooperative programs, in which educational institutions provide training facilities and contractors provide the instructors, also are proving successful.

Conrad Frank, vice president of Ghemm Co. Inc. in Fairbanks, says, "The stereotype of workers in construction must change. Today we find our skilled workers to be brighter and more articulate than ever. They want more than just Friday and payday. The opportunity to learn and grow is important to them. We have to respond to that if we intend to attract good workers.

"To keep labor costs down and productivity high, the industry is going to have to adapt training programs to produce multicraft workers - workers that can stay on the job longer because they are qualified to handle more tasks."
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Title Annotation:Special Report: 1990 Associated General Contractors of Alaska Annual Conference
Publication:Alaska Business Monthly
Date:Nov 1, 1990
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