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Filling craft positions and some salaried positions remains as great a challenge for contractors as it was a year ago, according to participants in AGC's 2017 Workforce Survey, released on Tuesday. (The site includes results by region and some states. Breakouts by firm size, union/nonunion, and project type will be added soon.) Of the 1,608 respondents, 70% stated they were having a hard time filling some hourly craft positions. In addition, 38% said they were having a hard time filling some salaried field positions; 35%, salaried office positions; and 16%, hourly office positions, while 9% reported no trouble filling any positions and 8% had no openings to fill. (These shares were all within two percentage points of the 2016 results.) The hardest craft positions to fill were carpenters, reported by 58% of firms that currently employ them (vs. 60% in 2016); electricians, reported by 53% (also 53% in 2016); bricklayers, 53% (up from 45% in 2016); concrete workers, 51% (49% in 2016) and plumbers, 50% (also 50% in 2016). Respondents reported less difficulty in finding two types of craft workers: roofers (reported as difficult by 41% in 2017 vs. 50% in 2016) and installers—sheet metal (31% vs. 45%). As in 2016, the hardest salaried positions to fill were project managers/supervisors, 48% (50% in 2016); estimating personnel, 32% (31% in 2016); and engineers, 28% (also 28% in 2016). Half of respondents said their firms increased base pay rates for hourly craft workers (vs. 48% in 2016) and 43% did so for salaried workers (also 43% in 2016) because of difficulty filling positions. More firms than in 2016 paid incentives/bonuses: 24% of respondents (vs. 20% in 2016) did so for hourly workers and 30% (vs. 27%) for salaried workers. Similar to 2016, about one-fifth of firms increased their portion of benefit contributions and/or improved employee benefits (hourly 20%; salaried, 21%). To add to their labor supply, firms turned to: overtime hours, 47% of respondents; in-house training, 46%; subcontractors, 41%; interns, 35%; engage with career-building programs, 27% (down from 37% in 2016, the only method with a substantial change in share); executive search firms, 23%; labor suppliers (craft), 22%; staffing firms and professional employer organizations (non-craft), 19%; and unions, 17%. Some firms used these substitutes for labor: labor-saving equipment, tools or machinery, 22% of firms; lean construction, 15%; offsite prefabrication, 13%; virtual construction methods such as building information modeling, 7%. These shares also were close to 2016 levels.
The producer price index (PPI) for final demand in July, not seasonally adjusted, dipped 0.1% from June but increased 1.9% year-over-year (y/y) from July 2016, the Bureau of Labor Statistics (BLS) reported on August 10. AGC posted tables and an explanation focusing on construction prices and costs. Final demand includes goods, services and five types of nonresidential buildings that BLS says make up 34% of total construction. The PPI for final demand construction, not seasonally adjusted, rose 1.1% for the month and 3.2% y/y. The PPI for new nonresidential building construction—a measure of the price that contractors say they would charge to build a fixed set of five categories of buildings—climbed 3.1% y/y. Increases ranged from 2.4% y/y for office buildings to 2.4% for health care buildings, 3.8% for schools, 4.1% for warehouses and 4.5% for industrial buildings. PPI changes for new, repair and maintenance work on nonresidential buildings ranged from 2.8% y/y for roofing contractors to 3.4% for electrical contractors, 3.5% for plumbing contractors and 3.7% for concrete contractors. The PPI for inputs to construction—excluding capital investment, labor and imports—comprises a mix of goods (59%) and services (41%). This index increased 2.5% y/y. The PPI for all goods used in construction rose 3.0% y/y, as the sub-index for energy climbed 6.5%, while the PPI for goods less food and energy rose 2.6%. The index for services increased 2.1%. PPIs for inputs to seven types of new nonresidential structures had increases ranging from 2.3% for educational and vocational structures to 3.5% for power and communications structures. PPIs for inputs tonew residential structures rose 2.7% y/y for single-family housing and 2.6% for multifamily. Materials important to construction that had notable one- or 12-month price changes include diesel fuel, 8.7% in July and 20% y/y; copper and brass mill shapes, 1.1% and 15%, respectively; steel mill products, 0.3% and 10%; gypsum products, 0.7% and 9.9%; aluminum mill shapes, -1.7% and 7.4%; and lumber and plywood, 0 and 5.2%.
Construction employment, not seasonally adjusted, rose from July 2016 to July 2017 in 259 (72%) of the 358 metro areas (including divisions of larger metros) for which BLS provides construction employment data, fell in 58 (16%) and was stagnant in 41, according to an AGC release on Wednesday. (BLS combines mining and logging with construction in most metros to avoid disclosing data about industries with few employers.) The largest gains again occurred in Riverside-San Bernardino-Ontario, Calif. (15,800 construction jobs, 17%) and the Los Angeles-Long Beach-Glendale division (11,200 construction jobs, 8%), followed by Portland-Vancouver-Hillsboro, Ore.-Wash. (9,300 construction jobs, 15%) and Las Vegas-Henderson-Paradise (9,200 construction jobs, 17%). The largest percentage gains occurred in Lake Charles, La. (21%, 4,300 construction jobs), followed by Lewiston, Idaho-Wash. (20%, 300 construction jobs); Riverside-San Bernardino-Ontario, Las Vegas-Henderson-Paradise and Madera, Calif. (17%, 300 combined jobs). The largest job losses again were in Houston-The Woodlands-Sugar Land (-8,300 construction jobs, -4%) and the Middlesex-Monmouth-Ocean, N.J. division (-3,100 combined jobs, -8%), followed by San Jose-Sunnyvale-Santa Clara, Calif. (-2,000 construction jobs, -4%). The largest percentage losses again occurred in Grand Forks, N.D.-Minn. (-22%, -1,100 combined jobs) and Danville, Ill. (-17%, -100 combined jobs). July employment was a record high for the month in 44 metros (dating back in most areas to July 1990); none set a new July low.
The Data DIGest is a weekly summary of economic news; items most relevant to construction are in italics. All rights reserved. Sign up at www.agc.org/datadigest.