Jeff McDonald//April 17, 2014//

While employment numbers released Tuesday paint a rosy picture for the construction industry in Oregon, some mechanical, engineering and plumbing contractors worry what will happen as the biggest project in the state begins to wind down.
Building equipment contractors have largely fueled the industry’s significant employment growth, adding 1,400 jobs in March and 2,600 over the past 12 months, according to the Oregon Employment Department.
Contractors cite a “confidential client in Hillsboro” as the source of recent robust growth. But that client is widely known as Intel, which in 2013 set a two-year timetable for the second phase of its D1X expansion.
But with no more plans for construction at D1X beyond the second phase, a drawdown is expected to begin this summer, Plumbing and Mechanical Contractors Association Executive Director Frank Wall said.
The PMCA projects that this year the Hillsboro site will have 1,134 union members working a total of 2.8 million hours. However, the group projects that by next year the site will have just 720 union members working a total of 1.8 million hours, according to a survey of union contractors.
“In our projections, we think coming in August, there is going to be a reduction in workforce,” Wall said. “At Intel, the ramp-up is definitely over.”
The PMCA also projects total union work hours in Oregon and Southwest Washington to fall from 4.9 million in 2014 to 3.8 million in 2015 – a 22.4 percent drop.
Nevertheless, seasonally adjusted construction employment in Oregon last month surpassed 80,000 jobs for the first time since 2009.
“The data that’s come out the last two months is indicative of very strong growth in construction employment and activity in Oregon,” said David Cooke, an economist for the Employment Department. “After reaching a low point in 2010, the industry has ramped up substantially over the past year and a half.”
At present, plenty of work exists for journeyman electricians and other nonunion tradespeople at the Intel site, said Leona Draper, executive director for Beaverton-based Independent Electrical Contractors of Oregon.
“Right now we are on the side of (worker) shortage,” Draper said. “Pretty soon that job at Intel is going to be done. We’re going to have an abundance of people looking for work at some point.”
Jim Proulx, business development manager for Portland-based Harder Mechanical Contractors Inc., said he believes work will slow as soon as this summer or fall.
“We’ve been maintaining a consistent high level of business,” he said. “We’re at the top of the bell curve, but we’re coming down to the other side. Unfortunately, it’s going to be sooner rather than later.”
Harder Mechanical Contractors also is building a Portland General Electric power plant in Clatskanie; however, that work will finish this year, Proulx said. He is expecting a “dogfight” when larger MEP contractors begin to wrap up work in Hillsboro.
The company, which has operations in 11 western states, will likely expand its reach outside of Oregon as those two projects start to draw down, Proulx said.
“The levels of business that we’re doing here locally are definitely going to drop,” he said.
Some potential projects in the state in the near future include the Oregon State Capitol renovation and an unspecified headquarters project in Beaverton, but nothing comparable in size or value of the Hillsboro project, Proulx said.
Despite the rising employment numbers, Dan Smith, president of Charter Mechanical Contractors Inc., also expects growth to hit a wall.
“I don’t see the opportunities,” he said. “A lot of our experience has been with the large company out in Hillsboro. The big splurge is mostly over. I don’t see a lot of opportunities to replace that right now. The project is on the wind-down.”