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Construction has the Jobs; What About the Workers in 2014

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By Eric Jay Toll for Arizona Builder’s Exchange

The jobs are going to be there in 2014 for construction workers, according to the Arizona Department of Administration. The question facing many builders is whether the skilled workers are going to be available to fill the jobs. ADOA projects modest job growth for 2014 in Arizona, however no single job sector even comes close to putting out as many “help wanted” signs as the construction industry in terms of percent of jobs gained.

With the state’s non-farm employment projecting growth rates of 2.0 percent for the full 2013 year and 2.3 percent for 2014, construction job growth rates are pegged at 7.1 percent through the end of next month and 7.1 percent for 2014. The next fastest growing job sector is professional and business services with a projected 4.9 percent growth rate for next year.

Constr. employmentConstruction Hiring Big Numbers

Total Arizona construction employment is projected to near 133K in 2014, the highest number since 2008. Job growth of 17K new hires in 2013 and 2014, however, is still not as high as the 17.2K jobs lost in 2010.

Although not even close to pre-recession numbers, the construction industry is expected to add nearly 2K workers in November and December, which would total 8.2K new jobs in 2013. Next year, the state says that another 8.8K jobs will be added.

JObsSkilled Worker Shortage Still Acute

The hiring demand is good news for East Valley Institute of Technology, Mesa, and Western Maricopa Education Center, Glendale, where courses are training students to step into these roles. The challenge is whether there are adequate numbers of skilled workers in the pipeline to take the jobs.

“We lost a generation of workers,” explains Mark Minter, CEO of Arizona Builders’ Alliance. “A lot of our skilled workers left the market and the industry during the recession. They have not returned, and some of the most skilled won’t.”

Finding workers for the skilled trades is harder than ever. Ryan Companies U.S. Vice President Molly Carson is concerned about the impact of job demand on worker supply. Earlier this fall, she told AZBEX “Margins are still very tight and owners are able to push building costs. We’re going to have to pay more for skilled labor, and that is going to continue to pressure profits.” (AZBEX, September 10) Ryan is building both the 2MSF Marina Heights project and 250KSF Hayden Ferry Lakeside III in Tempe at the same time.

ADOA says that the demand for new single-family homes is up 14.2 percent through the end of October. The residential construction growth rate is projected by the Western Blue Chip Consensus to close in on 30 percent next year.

100K Phoenix Construction Jobs Next Year

In 2014, the number of construction workers in Phoenix metro is projected to top 100K for the first time in five years. This is an increase of nearly 20K jobs since 2010. In Tucson, nearly 15.5K jobs this year and next year’s projection closing in 17.0K are the highest since 2010, but not close to the Phoenix growth rate; Tucson will add only 2K construction jobs in the five-year period.

Across the rest of the state, ADOA says that total construction employment in 2014 will also be the highest since 2010, but only 1.1K jobs are being added through next year, taking the total construction job count to 15.2K.

In terms of number of new jobs created since 2012, construction ranks fifth with 12,200 people hired. Leisure and hospitality created the most new jobs, 18,100 with professional and business services second at 14,700 jobs.

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