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Construction worker shortage could weigh on Harvey recovery
September 1, 2017 / 7:33 PM / 3 months ago

Construction worker shortage could weigh on Harvey recovery

NEW YORK (Reuters) - A nationwide shortage of construction workers may slow rebuilding efforts in the wake of Hurricane Harvey, which caused extensive flood damage to homes and businesses and is set to be one of the costliest natural disasters in U.S. history.

Nine years after the housing bust drove an estimated 30 percent of construction workers into new fields, the supply of skilled and unskilled labor remains tight at all levels of experience, according to the National Association of Homebuilders.

In Texas alone, which is in the middle of a building boom, 69 percent of contractors were having trouble filling positions before the storm hit, according to a survey from the Associated General Contractors of America.

Complicating matters is a federal crackdown on undocumented workers, who the Pew Research Center estimated last year made up 28 percent of Texas’ construction workforce.

Contractors in Houston are growing worried that they will have trouble finding enough staff to deal with the more than 130,000 structures flooded in Harris County, which is home to the United States’ fourth largest city.

“We expect that we are going to be inundated with phone calls once the water level goes down and we’re going to have to hire more people, but I don’t know where they will come from,” said Lynnie Griffin, who works at Houston-based WestStar Drywall, which focuses on the residential market.

And if one measure of anticipated demand for the type of services offered by Griffin is any indication, her company will be very busy in the months ahead. Shares of USG Corp, one of the dominant makers of wall board, have surged 11 percent since Harvey struck.

TIGHT MARKETS EVERYWHERE

The government’s monthly employment data released Friday showed 28,000 construction jobs were created nationally in August - the most in six months - but the total number of U.S. construction jobs remains more than 10 percent below is pre-recession peak.

In Texas, the construction sector had regained all the jobs lost to the recession more than two years ago, but the worker shortage has held back growth. Through July, the number of Texas construction jobs over the previous 12 months rose 1.5 percent, but that trailed overall employment growth in the state of 2.4 percent, U.S. Labor Department data shows.

Meanwhile, the Trump administration does not plan a temporary waiver of requirements for documents showing eligibility to work, as the Bush White House did after Hurricane Katrina struck New Orleans in 2005.

The dearth of available workers will likely further boost Houston-area wages, which have spiked over the last three years, said Phil Thoden, president of the Austin chapter of the Associated General Contractors.

Dry wall tapers, for instance, earned an average hourly wage of $21.26 in 2016, a 29 percent jump from three years before, while carpenters earned an average of $25.09 per hour, a 57 percent increase over the same time, according to the Houston Construction Industry Wage Survey, a project funded by several contractor associations in the city.

“There’s a worker shortage and unprecedented demand for new construction in central Texas, so those things are a perfect storm impacting our labor market,” Thoden said. With out-of-state license plates growing increasingly common at job sites throughout the region, it is clear that construction workers are moving to the area for work, yet the overall labor shortage remains, he said.

Reporting by David Randall; Editing by Dan Burns and Andrew Hay

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