In today’s construction news, read about how, for all those in need of housing, the United States is predicted to require an additional 7 million dwellings. However, experts claim that America would require a lot more construction workers to create all those homes. Meanwhile, it should come as no surprise that the Dallas area recorded the largest growth in construction jobs last year of any U.S. metro area, given the abundance of construction cranes dotting the skyline. Lastly, order bookings in the construction sector totaled €14.8 billion (US$15.9 billion), with a rolling 12-month book-to-build ratio of 103%. Skanska reported that its backlog of orders remained substantial.
The US Needs Workers to Build Homes First
Original Source: The US needs homes. But first, it needs the workers to build them.
To house all the homeless, the U.S. needs 7 million extra homes. However, experts think America would need more construction workers to create all those homes.
“The biggest challenge that the construction industry is facing, to put it tongue in cheek, is that people don’t want their babies to be construction workers,” said Brian Turmail, vice president of public affairs and strategic initiatives at the Associated General Contractors of America, which has advocated for workforce development.
Turmail said educators and legislators have encouraged kids to attend four-year colleges for decades, resulting in a scarcity of electricians and plumbers. Turmail said that most craftsmen he knows started off through personal connections.
The National Center for Construction Education and Research reports that more people are leaving the business than joining it after the 2008 Great Recession and COVID-19 forced construction cuts.
“If there are fewer workers available, construction takes longer,” said Lily Roberts, managing director for inclusive growth at the left-leaning Center for American Progress in Washington, D.C.
Construction says it has had a workforce shortfall since before the outbreak. Erika Walter, director of media relations for Associated Builders and Contractors, said employment isn’t rising fast enough.
The Associated Builders and Contractors reported 459,000 industry job opportunities at the end of November earlier this month. It was the highest job opening rate since 2000 at 5.4%.
Several states have increased their construction workforces recently. They’re sponsoring apprenticeships, community college programs, and industry awards to establish a domestic pipeline of trained construction workers. Nearly 3,000 Montana apprentices work through a state program that connects students to industry sponsors.
Karl Eckhart, National Association of Home Builders vice president of intergovernmental affairs, said, “The big surprise in 2023 for me was that all of a sudden these governors did more than just pump money into the labor shortage problem.” “We must speed up this process to get shovels under the ground.”
Crackdown on immigration
According to a study released this spring by economists at the University of Utah and the University of Wisconsin-Madison, the U.S. construction industry lost about 30% of its workers during the Great Recession and barely recovered before the COVID-19 outbreak.
The Obama administration’s Secure Communities immigration crackdown caused much of the shortage, according to the authors.
The authors noted that a shortage of lower-skilled labor will make it harder to find workers to finish framing a house, reducing demand for electricians and plumbers later in construction.
Another difficulty is the industry’s aging workforce. Over 20% of construction workers are 55 or older, and the Bureau of Labor Statistics predicts a large retirement in the coming decade.
An Associated General Contractors poll last year found that 68% of construction firms claim their applicants lack the skills they need.
Because we need homes and the typical electrician in America is 50 years old, Eckhart of the National Association of Home Builders said they had committed hundreds of millions in labor training.
“Gen X and younger, your guidance counselor never said, ‘Hey, you should become an electrician.’” That talent is gone from the industry.”
Labor force building
Experts and research believe the building business isn’t recruiting diversely enough.
A 2022 U.S. Department of Labor assessment found that many construction and trade apprentice programs had sponsors who do not seek or hire underrepresented groups and may not know how to attract them.
“In the construction industry, a generally untapped group of potential employees is women, including women of color,” said Center for American Progress’ Roberts.
According to the federal Equal Employment Opportunity Commission, women and persons of color are underrepresented in construction, especially in higher-paid, more skilled occupations.
Rose Khattar, director of economic research for inclusive economy at the Center for American Progress, said some governments have trained to diversify their workforce.
Several governments have announced trades education initiatives in recent months.
In November, New York Democratic Gov. Kathy Hochul stated that over $12 million in grant money would train 2,000 people in welding, machine repair, and construction.
Republican Gov. Mike DeWine said that 35 Ohio high schools would get nearly $200 million in grants to improve electrical, welding, and carpentry instruction.
Maryland Democratic Gov. Wes Moore signed an executive order requiring state construction authorities overseeing projects above $5 million to consider hiring certified apprenticeship contractors.
“I think the stigma of the construction industry is that you’re going into building trades because you couldn’t do anything else,” said Shelly Bell, vice president of workforce development at Tallahassee Community College, which has a state-sponsored trades education program.
The country’s housing scarcity creates demand and long-term employment security, she said. “We want our students to see a career in construction with upward mobility and professional fulfillment,” she said.
Eckhart added that policymakers should consider workforce demands for another reason.
If you don’t train skilled staff, you hurt consumers, he said. “Without skilled workers, homes won’t be stable and functional, and you can’t afford to cut corners when building homes.”
Dallas-Fort Worth Leads Job Growth in Construction
Original Source: Dallas-Fort Worth tops U.S. in construction job growth
No wonder Dallas had the most construction job increase last year, with all the cranes on the skyline.
Dallas created 12,300 building jobs in 2023, up 8%. According to the Associated General Contractors, Fort Worth construction jobs increased by 2,500.
Phoenix added 10,400 construction jobs, second fastest, followed by Riverside, Calif., with 10,000. Fifth with 8,100 job gains was Austin.
The contractors’ association found construction jobs rising in 63% of U.S. markets.
“Even more metro areas would have added workers if they were available,” said contractors association chief economist Ken Simonson in the report. “But a separate government report showed 374,000 construction job openings at the end of December, illustrating contractors’ difficulty filling positions.”
Dallas-Fort Worth led the nation in 2023 employment growth with 134,200 more jobs in December than a year earlier, according to the BLS. In 2023, D-FW began massive construction initiatives.
Ground was broken on Irving’s $500 million, 850,000-square-foot Wells Fargo regional office facility. North of downtown Dallas, Goldman Sachs’ huge office complex began construction.
Dallas-Fort Worth tops office and apartment building nationwide.
Dallas hired the most construction workers in 2023, but Houston led the nation in building sector job losses. Houston has 5,900 fewer construction jobs than in 2022.
The Associated General Contractors reported falling construction jobs in suburban New York City and Denver last year.
Record US$22 Billion Order Backlog for Skanska
Original Source: Skanska reports record order backlog of US$22 billion
Order bookings in construction totaled €14.8 billion (US$15.9 billion) with a rolling 12-month book-to-build ratio of 103%. Skanska reported a large order backlog.
“It’s at a historically high level,” said Skanska CEO Anders Danielsson of the €20.5 billion construction backlog.
Construction income was €499 million for the year, a 3.5% operating margin.
In a public announcement of year-end results, Danielsson said the margin was on track and showed “overall strong performance” in construction.
“The construction stream ended the year strongly with a high operating margin and solid order intake,” Danielsson reported. With good Nordic and US performance, operating margin for the full year met our long-term aim. The year saw robust US and Norwegian order intake, keeping the order backlog high.
Strong US building market
Skanska anticipates ongoing US construction industry growth and a small European slowdown.
“We have a strong performance in the US market, both building and civil, which is good,” said Danielsson.
“The US market continues to show strength, especially the infrastructure segment, which is supported by strong federal funding programs,” the firm reported in 2023.
“Many European building markets are experiencing lower activity and increased competition. Strong infrastructure, energy, and water spending has improved our forecast for Norway’s civil market, which normally provides stability over the cycle.
In Finland and the UK, Danielsson said activity is lowest.
Skanska expects a weak residential development market in the Nordics and Europe and a weaker commercial property development market in Europe and the US, according to the research.
Summary of today’s construction news
In summary, Governor Mike DeWine, a Republican from Ohio, declared that over $200 million in grants would be given to 35 high school programs in the state to expand their training facilities for welding, carpentry, and electrical trades. And the Democratic governor of Maryland, Wes Moore, signed an executive order mandating that authorities in charge of state building projects costing more than $5 million take into account the possibility of hiring contractors who take part in registered apprenticeship programs.
Meanwhile, the Houston area topped the nation in job declines in the building sector in 2023, despite the fact that the Dallas area was recruiting more construction workers than any other location in the nation. 5,900 fewer jobs in the construction sector were available in Houston at the end of the year compared to the same period in 2022. The Denver region and the suburbs of New York City saw a decline in construction jobs last year as well, according to the Associated General Contractors.
Lastly, according to the research, Skanska expects the commercial property development market in Europe and the US to be weaker and the residential development market in the Nordic region and the rest of Europe to be tepid.
