{"id":66,"date":"2018-09-18T16:00:37","date_gmt":"2018-09-18T16:00:37","guid":{"rendered":"http:\/\/staging.djcorprod.wpengine.com\/skilledmag\/?p=66"},"modified":"2018-09-24T12:36:59","modified_gmt":"2018-09-24T12:36:59","slug":"labor-shortage-clouds-contractor-confidence","status":"publish","type":"post","link":"https:\/\/djcoregon.com\/skilledmag\/2018\/09\/18\/labor-shortage-clouds-contractor-confidence\/","title":{"rendered":"Labor shortage clouds contractor confidence"},"content":{"rendered":"
\"Felix<\/a>

Felix Lopez, left, and Alejandro Merida, both carpenters with Wood Mechanix, raise a wall while building a mixed-use apartment building in southeast Portland last month. The shortage of skilled labor continues to be a major cause for concern among contractors, according to the USG Corporation + U.S. Chamber of Commerce Commercial Construction Index. (Sam Tenney\/91ÊÓƵ file)<\/p><\/div>\n

Contractors nationwide remain optimistic about the state of the construction industry, according to the most recent USG Corporation + U.S. Chamber of Commerce Commercial Construction Index.<\/p>\n

Released June 5, the report for the second quarter of 2018 provides a snapshot of market conditions via a survey of contractors. The main takeaway is that while work backlogs and revenue expectations remain strong, the ongoing shortage of skilled labor is causing increasing concern among general contractors who fear it might erode their ability to carry out projects. This is the fourth straight quarter in which more than 90 percent of contractors surveyed have expressed concern over labor shortages.<\/p>\n

\u201cConfidence is solid; we\u2019re happy with where we\u2019re at,\u201d said Brandon Flint, vice president of operations at Aloha-based INLINE Commercial Construction. \u201cWe do feel like it\u2019s plateaued a little bit, predominantly because of the workforce shortage. We\u2019re sort of maxed out on the work we can perform.\u201d<\/p>\n

The ongoing dearth of skilled tradespeople is having noticeable effects. Wages have risen by as much as a third in some trades, and development of project schedules has become much more challenging for general contractors.<\/p>\n

\u201cI don\u2019t think people understand how big of an issue it is,\u201d Flint said.<\/p>\n

It appears to be systemic.<\/p>\n

\u201cThere really isn\u2019t a quick fix out there,\u201d said Mike Salsgiver, executive director of Associated General Contractors\u2019 Oregon-Columbia chapter.<\/p>\n

The recession forced companies to do more with fewer personnel, Salsgiver added. But eventually demand ramped up significantly.<\/p>\n

\u201cIt served them well,\u201d he said. \u201cBut when the recovery kicked in, we\u2019re now starting to see the outer limits of that. At some point you need to bring more companies on line.\u201d<\/p>\n

Further, rising costs of materials, particularly steel, is another area of concern. According to the report, 86 percent of contractors surveyed expect new tariffs on imported steel and aluminum to have a \u201cmoderate to severe impact\u201d on their business over the next three years. More specifically, 63 percent of respondents said that steel is their top material of concern in this regard.<\/p>\n

\u201cIt\u2019s unfortunate we\u2019re seeing that kind of dynamic at a time when the economy is doing well,\u201d Salsgiver said. \u201cWe\u2019re not supporters of tariffs; they generally do not help the economy and there\u2019s all sorts of data out there to show this.\u201d<\/p>\n

A separate analysis of U.S. Department of Labor producer price indexes and employment cost indexes released by the Associated General Contractors of America last month showed that the costs of numerous materials critical to construction have risen significantly over the past year.<\/p>\n

\u201cWe\u2019re feeling the same impact everyone else is,\u201d Flint said. \u201cThe biggest challenge we\u2019re having is subcontractors in particular won\u2019t maintain their pricing longer than about a week, so it\u2019s making it extremely hard to negotiate deals or maintain costs.\u201d<\/p>\n

The AGC report shows that steel milled product prices jumped 10.5 percent, fabricated structural metal prices went up 13.1 percent, steel pipe and tube prices rose 13.3 percent and aluminum mill shape prices increased by 17.3 percent. Also, lumber and plywood costs increased 13.9 percent, in part because of tariffs imposed on Canadian soft woods in April 2017.<\/p>\n

Finally, the spiraling price of diesel fuel is also getting attention. It rose a whopping 44.5 percent over the last 12 months. Between April and May 2018, the price of diesel rose 8.8 percent.<\/p>\n

Overall, the cost of all goods used in construction rose a cumulative 8.8 percent from May 2017 to May 2018.<\/p>\n

\u201cThe recession left a lot of money washing around,\u201d Salsgiver said. \u201cAnd when the money started to move, the economy picked up at a pretty white-hot pace, so you would expect to see material prices increase in that context.\u201d<\/p>\n

And regardless of tariffs, work backlogs are sitting at an average of 9.3 months; the ideal is 12.7 months, according to the report. Meanwhile, 96 percent of survey respondents have high or moderate confidence in the demand for commercial construction, while 52 percent expect their revenues to increase over the next year.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Contractors nationwide remain optimistic about the state of the construction industry, according to the most recent USG Corporation + U.S. Chamber of Commerce Commercial Construction Index. Released June 5, the report for the second quarter of 2018 provides a snapshot of market conditions via a survey of contractors. The main takeaway is that while work …<\/p>\n","protected":false},"author":5138,"featured_media":164,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18615],"tags":[],"class_list":["post-66","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-headlines"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/posts\/66"}],"collection":[{"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/users\/5138"}],"replies":[{"embeddable":true,"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/comments?post=66"}],"version-history":[{"count":0,"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/posts\/66\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/media\/164"}],"wp:attachment":[{"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/media?parent=66"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/categories?post=66"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/djcoregon.com\/skilledmag\/wp-json\/wp\/v2\/tags?post=66"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}