No, that is not in reference to the rise in births after the storms on the East Coast, it refers to the shortages in skilled labor that are beginning to be a real concern for the general contractors and subcontractors in the region as the economy rebounds and the energy industry grabs the workers it needs for the shale plays in West Texas.
According to a recent article in the Houston Business Journal (HBJ) [subscription required], three major factors are in play right now, and even though they appear positive on the surface, they could also create problems for the construction workforce in the Houston region and the rest of the country.
First, during the recession, the construction industry unemployment passed 20 percent across the U.S. as construction of all sorts was cut back or shut down in response to the economy. As the recession continued and many workers could not find work, they moved to new jobs, retired, or even went back to Mexico in hopes of finding a way to support their families there.
That removed a big chunk of the workforce, and they have not come back or will not come back as the economy continues to improve.
Second, technological advances in the energy industry made it possible to retrieve oil and natural gas in areas where it was not previously profitable. As they began to play in the shale, they hired the workers they needed, many of them former construction workers.
Third, in the Houston region, a number of school districts and institutions passed bond elections and have been in design for several billion in new or renovated construction projects. All of those projects will require large numbers of workers to meet their schedules and budgets.
The HBJ article points out one other issue that is beginning to occur. We wrote a couple of months ago and issued a warning for general contractors and subcontractors to watch out for the recovery. The subcontractors have cut their margins so thin that they have depleted their cash reserves to the point that many of them will go bankrupt during the recovery just when we need the extra manpower.
So, we are left with a major building boom beginning, an energy boom underway, and not enough workers to meet the demand. The article points out that a worker in Boston who made $34,380 a year there can make $42,610 a year here with no state income tax and a lower cost of living. Looks like an opportunity for those workers who want to try Texas for a change. If you have the skills, you should not have any problems finding a job in the construction industry.
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