A Sustainable Workforce Starts With You
Construction Industry Resources, LLC has released an article with in-depth analysis of the consequences of the trade war between the United States and its major trading partners on Construction and other Gulf Coast Industries. [node:read-more:link]
The presidential election of November 2016 represents an historic change in the United States, producing a new President-elect, Donald J. Trump, who has proposed policies to “Make America Great Again.” Those policies include controlling immigration, renegotiating trade agreements, raising defense spending (of the U.S. and its allies), cutting personal and corporate tax rates, increasing energy independence, reducing regulation, and spending up to $1 Trillion to rebuild U.S. infrastructure. All or any combination of these, could potentially have a powerful impact on our future.
A review of the construction outlook for chemical plants, LNG terminals, gas plants, refineries, and transmission and distribution for oil and gas leads us to believe, despite abundant uncertainty, that the proposals of President-elect Trump improve the prospects for industrial construction almost across the board.
Regulatory changes will encourage the production of natural gas – encouraging investment in chemical plants, natural gas liquefaction facilities, refineries, and natural gas plants – even though increased capital costs, due to higher interest rates, will somewhat reduce those investments. The outlook for pipelines is better, since the Trump Administration will promote the Keystone North project and encourage the production and utilization of domestic oil and natural gas. [node:read-more:link]
Compared to other industries, construction productivity has declined significantly. Hear directly from owners on how to improve productivity.
The CLMA (Construction Labor Market Analyzer) white paper, Construction Productivity in an Imbalanced Labor Market highlights the construction labor productivity challenge as a major issue due to declining skill levels and labor shortages. One reason identified for poor productivity includes the fact that construction methods have not changed in decades and the industry has shown a marked reluctance to embrace new approaches such as lean manufacturing techniques.
The Need to Buck Current Productivity Trends
The chart on page 13 of the report (also shown above) shows regional changes in labor productivity as reported by owners and contractors. Overall, 49% felt that productivity was declining, with the worst areas including the Gulf Coast, the Southeast and the Atlantic Midwest while areas such as the Northwest appear to be bucking these trends. [node:read-more:link]
Craft labor shortages are a serious issue with an enormous impact on project productivity. To gain a better understanding of productivity from their perspective, the Construction Labor Market Analyzer and the Construction Users Roundtable have collaborated in recent years to conduct surveys of construction owners, contractors and unions across the United States.
The new CLMA® white paper, Construction Productivity in an Imbalanced Labor Market, assimilates that data and addresses the construction industry productivity and labor shortage challenges. It covers 6 key topics, and is now available for download.
The data verifies that an imbalanced labor market is a clear leading indicator of poor productivity. This white paper offers the opportunity to hear from your peers about the labor risk and decreasing industrial construction productivity issues they’re facing. [node:read-more:link]
Craft shortages continue to be a boon for experienced workers who are commanding top pay for their high-demand skills. On the other hand, rising wages in a shortage environment tend to benefit unskilled workers also, and employers are too often paying premium wages for insufficient training and lower productivity. Why? Because bodies are needed and employers must compete for every craft worker.
The Engineering News-Record article titled Craft Pay Ramps Up As Worker Gaps Grow (October 2015), points out that as construction spending increases toward pre-recession peaks, worker pay is following suit, and some employers are seeing the largest pay escalation in decades. In fact, the Construction Labor Market Analyzer (CLMA) projects wage and per diem escalation of 2-4% over the next few years with the most highly skilled crafts expected to grow at the greatest rates. [node:read-more:link]
On May 29, 2014, I had the opportunity to be on the Louisiana Business and Industry Show to discuss the skilled labor market challenges and the tools available to more effectively plan project labor and manage project labor risk.
We discussed the Construction Users Roundtable (CURT) efforts to aggressively address this growing challenge and how the Construction Labor Market Analyzer® (CLMA®) is using collaborative technology to assist. This remarkable tool is helping owners, contractors, unions and other industry stakeholders dynamically understand the skilled labor market in a collaborative environment and more effectively know how to employ risk mitigation strategies. As stated by Tim Johnson, the show’s host, the CLMA® is aligned with CURT and is a first-of-its-kind tool that provides skilled labor imbalance projections dynamically. [node:read-more:link]
The construction industry is facing a perfect storm of issues, which will result in severe skilled workforce shortages in the near future. The Construction Labor Market Analyzer® (CLMA) provides the reliable data that Owners and contractors need to plan their future projects to avoid higher labor costs and missed schedules because of skilled trade shortages. The CLMA® also provides regional trend information by craft to focus new recruiting and training programs to the critical needs of the industry.
The History
When the construction volume peaked in 2006 to 2008, there were more projects than there were skilled trades to work on them. Competition for skills increased wages and incentives, which resulted in busted budgets, missed schedules and sometimes, cancelled projects. Contractors were using extended overtime, per diems, completion bonuses and other innovative approaches to staff their projects. [node:read-more:link]
Real improvement requires actionable data. Measures are used to establish realistic goals and to track progress, and there are many examples in the construction industry. Safety improvement is based on measures of recordable and lost time accidents. Cost management uses budgets and spending reports. Quality improvement is based on regular reports on trends of defects to identify problem areas.
To improve the construction skilled labor workforce, we need good, reliable data on the workforce size and the future needs. How many skilled workers do we already have? How many do we need now? What are the future needs for each craft? Which specific skills are critical for the types of projects expected in the next 5 years? [node:read-more:link]
