Shortage of Texas construction workers leads to higher costs, delays

If progress on the construction projects you pass by on your commute to work each day seems inordinately slow, you’re probably right.

More than three-fourths of Texas construction firms say they can’t hire the workers they need, a trend that has been delaying completion dates and increasing building costs, according to a study by the Associated General Contractors of American and Autodesk.

Nationwide, 80 percent of construction firms say they’re having difficulty filling positions for skilled laborers, the study found.

The tight labor market, which isn’t expected to improve any time soon, has been a big problem in Austin and other major Texas cities.

In the booming Austin-Round Rock metro area, employment in the construction sector has climbed by more than 7 percent over the past year — bringing the total number of regional jobs in the industry to 67,400 in July, according to the Texas Workforce Commission — as builders have scrambled to try to keep pace with surging demand for new housing, retail outlets and other infrastructure.

Their efforts have been met with only limited success.

“My sense is that (the timeframe for completing Austin construction projects) is just about as bad at it has ever been, and I have been here since the mid 1980s,” said Jon Hockenyos, president of Austin economic consulting firm TXP Inc., who noted that he was speaking anecdotally. “Everything is more expensive, and everything takes longer than people think it should.”

A number of factors are contributing to the trends in Austin, Hockenyos said, such as the strong local economy that has been attracting thousands of new residents, as well as continued low interest rates that are facilitating a building boom. Still, he said, the tight construction labor market clearly is exacerbating the situation.

“There is a huge amount of demand” for building projects in the Austin area, he said. “If you don’t have enough people to do the work, it is going to take longer and they’re going to get paid more, which is going to be passed on.”

The new study bears out that assertion.

More than half of Texas construction firms surveyed by Associated General Contractors of American said the labor shortages have forced them to raise prices, and 44 percent said projects have taken longer to complete because of the dearth of workers.

Overall, however, scarce and costly labor isn’t a new challenge for Texas builders.

A punishing construction labor shortage has plagued builders in the fast-growing state for years and has sent industry leaders scrambling for fixes, most recently prompting them to plead for immigration reform to help replenish an aging workforce. Fewer young people have been entering the construction trades, while tighter restrictions on immigration and competition from other sectors have been crimping the industry’s overall workforce.

In addition, the hurricanes in the Gulf Coast last year — and the resulting massive cleanup and rebuilding efforts — have added to the strain.

“Labor shortages in the construction industry remain significant and widespread,” Ken Simonson, chief economist for the Associated General Contractors of American, said in the report. “The best way to encourage continued economic growth, make it easier to rebuild aging infrastructure and place more young adults into high-paying careers is to address construction workforce shortages.”

Texas general contractors say they’re having a harder time attracting workers now than they did just a year ago. The shortages are worst for pipe-layers, electricians, bricklayers, sheet metal workers, cement masons, roofers and plumbers.

And more than half of construction firms around the state who were surveyed say they have lost workers lured away to other employers in the building industry.

As a result, almost 70 percent of Texas companies said they have increased pay in the past year to try to retain or attract workers. About 30 percent said they have provided bonuses.

“With a rise in the share of firms having trouble finding skilled craft workers, it’s evident that we need to reskill the future workforce,” said Sarah Hodges, senior director of construction business line at Autodesk, a major architecture, engineering and construction software and systems firm that co-sponsored the survey.

Almost half of the companies surveyed in Texas said they don’t anticipate an easing of the labor shortages over the next 12 months. In addition, 37 percent say they expect shortages of hourly craft laborers to worsen.

Additional material from the Dallas Morning News.

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