Construction Workforce Taskforce Report

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1 Construction Workforce Taskforce Report Sponsored by a grant from the Department of Business and Professional Regulation and Building a Safer Florida, Inc. to the M.E. Rinker, Sr. School of Construction Management at the University of Florida Jim Sullivan, Ph.D. Charles Kibert, Ph.D. Shirley Morque, Ph.D. (Student) Andriel Fenner, Ph. D. (Student) M.E. Rinker, Sr. School of Construction Management at UF

2 The Rinker School The M.E. Rinker, Sr. School of Construction Management at the University of Florida combines the skills, diverse experiences, and talents of its faculty with an innovative educational curriculum to educate future construction professionals. Housed in the College of Design, Construction and Planning, the Rinker School is dedicated to construction science and management and is committed to excellence in education and research. Established in 1935, it is the oldest school of construction in the U.S. and the first program to receive accreditation from the American Council for Construction Education (1975). Twenty faculty members teach and guide the School s 500 undergraduate and 120 graduate students. The School s new building, Rinker Hall, is the 26th building to have been awarded LEED Gold certification by the U.S. Green Building Council. The Rinker School has substantial experience with crafts training and has had extensive collaboration with the National Center for Construction Education and Research (NCCER), the premier crafts training education organization, for the past 18. Most recently the Rinker School developed a crafts training program, Training for Manufactured Construction (TRAMCON), that provides students with hybrid manufacturing/construction credentials. These credentials also provide training across multiple crafts including carpentry, plumbing, electrical, and HVAC using NCCER training modules. Mission Statement The mission of the M. E. Rinker, Sr. School of Construction Management is to be the center of excellence for construction. The Rinker School will pursue this by: 1. Promoting professional and ethical behavior in education and practice, 2. Advancing the industry by creating new knowledge through research and scholarly activities, 3. Educating individuals in principles, knowledge and skills required to be successful in their professional careers, and 4. Providing service and transferring knowledge to the citizens of Florida, the construction industry, professional societies, the nation, and the world. The Rinker School will achieve this mission by fostering a core culture of value and quality. Faculty James G. Sullivan, Ph.D. Undergraduate Program Coordinator M.E. Rinker Sr., School of Construction Management 307 Rinker Hall, University of Florida sullj@ufl.edu Charles J. Kibert, Ph.D., P.E. Powell Center for Construction & Environment M.E. Rinker Sr., School of Construction Management 342 Rinker Hall, University of Florida ckibert@ufl.edu

3 Executive Summary The Rinker School of Construction Management at the University of Florida has been tasked with evaluating workforce training availability in Florida. This study will support the evaluation of workforce development programs in the state and allow for better understanding of the types and training offered as well as where they are offered and how they are sponsored. Workforce shortages in the state are historically cyclical and follow significant lulls in the construction volume throughout time. Most recently there was a significant downfall in construction volume in Florida starting in 2007 (see Figure 1 below) with the recovery beginning in The significance of this most recent economic cycle to the state is that the downturn started earlier in Florida and lasted longer than the national average. Figure1: Housing starts from 2005 through 2014 Construction employment follows the general housing or building trends as well. The difficulty for the recovery market is replacing the trained workforce that left the state or the industry during the economic downturn. High demand for trained workers increases pressure on construction firms to employ lesser trained hires that are trained through an informal on-the-job training (OJT) process, resulting in initial quality, productivity, and safety issues compared to a trained worker. National construction employment demands are reflected in Figure 2 below.

4 Figure 2: Department of Labor Statistics (Job openings in 1000 s) Construction workforce training appears in various formats, including high school magnet programs, vocational schools, and apprenticeships. The purpose of this report is to provide a snapshot of the availability of training relative to the increase demand and the lack of interested applicants. The training programs themselves are not adequate for filling the workforce void. Current studies indicate that 50% of the construction workforce is 45 years or older. An aging workforce, increasing in construction volume, and decreasing interest in construction employment is creating the perfect storm for severe labor shortages. These labor shortages have the potential to limit the growth of the construction industry, increase construction costs, and limit the types of construction trades available to service market needs. These factors are the reasons that a Workforce Task Force and research are required.

5 Project Deliverables The Construction Workforce Taskforce has been established via state legislation to address the shortage of skilled crafts people and inspectors training in Florida. The taskforce will discuss and recommend methods for craft workers and inspectors in the state of Florida. The Workforce Taskforce specifically aims to: 1) Address the critical shortage of individuals trained in building construction and inspection. 2) Develop a consensus path for training the next generation of construction workers in the state. 3) Determine the causes or the current shortage of a trained construction industry work force and address the impact of the shortages on the recovery of the real estate market. 4) Review current methods and resources available for construction training. 5) Review the state of construction training available in K-12 schools. 6) Address training issues relating to building code inspectors to increase the number qualified inspectors. In addressing the aims listed above, the Rinker School will provide the following 1. Identify and research available construction training programs, including the specific training available and the necessary qualifications for that training, from all sources in Florida, including high schools, secondary schools, apprenticeship programs, vocational/technical, college, and private training. 2. Provide a listing of construction training programs categorized in at least the following ways: duration of the program, cost of the program, and qualifications necessary to participate

6 Bullet point 1: Address the critical shortage of individuals trained in building construction and inspection 1.1.Nationwide market conditions and drivers The construction industry has been one of the fastest-growing major industries in the U.S since But as the industry recovers from the great recession of 2008, several construction companies across the country started to complain about the scarcity of qualified workers. While the shortage of labor force in the construction industry for southeast states, especially Florida, is the major topic of discussion in this report, a broader scenario must be considered when making assumptions on the local labor force movement. Even though the shortage of labor workers has been widely emphasized during the past years, several signs of a tightening labor market were already being noticed in U.S. since The most important ones are the falling unemployment rate, the rising number of job quitters, the number of job openings outpacing the number of hires, and the historically low participation of the American labor force (Figure 1, Figure 2). Due to these facts, the current shortage of skilledlabor workers is not an unexpected situation. In the construction industry, particularly, the construction and pipeline industry has already recognized the possible shortage of skilled professional for more than 20 years ago. Figure 1 Number of job vacancies relatively high compared to the number of job openings in U.S. from 2006 to Source: Trading Economics

7 Figure 2 The low labor force participation and the unemployment rate tightening the labor market. Source: Trading Economics Therefore, the high employment growth rate based on the national economic recovery combined with the low workforce participation may be the core problem for the current workforce shortage. According to Future Occupational Labor Shortage Index, developed by the Conference Board, many occupations may experience a very high short-term shortage in the future because of the higher predicted employment growth, but the shortage is not always related to the employment growth (Figure 3). In fact, most occupations will experience a significant gap between new entrants and the workers who will possibly leave the industry. Unsurprisingly, most of these occupations belong to the skilled-labor category, the group of jobs that does not require a bachelor s degree but require a significant amount of training. Construction-related jobs, particularly, are highly susceptible because of both high expected growth and very low replacement levels.

8 Figure 3 - Graph summarizing the Future Occupational Labor Shortage Index. The colors represent the risk of labor shortage, while the number represent the index factor. The higher the number, the higher the risk of labor shortage. Source: The Conference Board and Bureau of Labor Statistics There are several reasons that may explain the high shortage risks for construction-related occupations However, for the current timeline, the most influential one be attributed to the economic growth after the downturn of Construction employment nationwide reached around 6,700,000 jobs in November 2016, representing the highest employment increase in construction since Considering the period 2012 to 2014, there was a 6.9% increase in residential construction, propelling several minor related industries (Figure 4), such as manufactured wood products (4.2%), architectural and engineering services (3.1%), manufactured furniture and products (2.6%), and building materials and supply stores (2.4%).

9 Tech Services Mining Transportation Above Average Growth Computer system 4.2% design Data processing 3.4% Architectural and engineering services Oil and gas extraction 6.2% Support activities for mining Manuf. Transportation equipment Housing and Construction Construction Residential building Residential specialty trade contractors 6.9% 4.7% 3.1% Manuf. Wood products 4.2% 5.2% 2.9% Services to buildings and dwellings Heavy and civil engineering construction Manuf. Furniture and related products Construction Others Non-store retailers 4.7% Nonresidential building Figure 4 - Employment growth rates for a selected group of industries between 2012 and Source: The Conference Board 2.9% 2.7% 2.6% 2.5% In order to evaluate the resent industry complains related to the scarcity of construction labor force, associations and national departments became to develop studies periodically, such as the monthly surveys by the National Association of Home Builders. As an example, in the 2012 NAHB s report, at the beginning of the economic growth, 30% of surveyed builders were reporting labor shortages mostly for framing crews, carpenters and bricklayers. One year later, almost 50% of construction companies were already reporting labor shortages. By the end of 2014, the share of home builders increased to 63%. A similar trend in the reported labor shortage also could be observed in different building construction sectors, such as in home remodeling sector in which carpentry, framing and bricklayer occupations were the most reported (Figure 5; Figure 6).

10 Share of Builders Reporting Labor Shortages (2014) Serious shortage Some shortage No shortage Building maintenance manager 2% 23% 75% Excavators 5% 24% 72% HVAC 3% 26% 72% Weatherization workers 3% 26% 71% Electricians 5% 32% 64% Roofers 6% 31% 63% Painters 7% 31% 62% Plumbers 5% 33% 62% Bricklayers/Masons 10% 39% 51% Carpenter-finished 12% 46% 42% Framing crews 15% 45% 41% Carpenter-rough 11% 52% 37% Figure 5 Share of builders reporting labor shortage in Source: National Association of Home Builders. NAHB Remodelers Reporting Labor Shortages (2014) Serious shortage Some shortage No shortage Building maintenance manager Excavators HVAC Weatherization workers Electricians Roofers Painters Plumbers Bricklayers/Masons Carpenter-finished Framing crews Carpenter-rough 2% 15% 5% 28% 3% 22% 2% 23% 5% 32% 8% 27% 7% 31% 6% 27% 10% 30% 18% 24% 38% 45% 46% 42% 83% 67% 74% 75% 63% 65% 62% 67% 52% 36% 29% 30% 0% 20% 40% 60% 80% 100% Figure 6 - Share of home remodelers reporting labor shortage in Source: National Association of Home Builders.

11 Similar studies were also developed by the Associated General Contractors of America (AGC). In the 2015 report, the AGC surveyed almost 1400 members across the country, in which an overwhelming majority of companies expected to employ hourly craft (89%) and salaried professionals (72%) in the next 12 months, but most of them (86%) were already experiencing problems filling available positions. According to 79% of respondents, the shortage was more severe among hourly craft workers, such as carpenters (73%), sheet metal installers (65%), and concrete workers (63%). Only 52% of respondents reported problems to find qualified salaried professionals, such as managers/supervisors (55%), estimating professionals (43%), and engineers (34%). In addition to that, employment projection by the U.S. Bureau of Labor Statistics indicate an impressive increase for construction jobs with an annual growth rate of about 2.6%. While the average employment growth for all sectors in the country will remain around 11.3%, the construction industry is expected to increase around 28.8% of its labor force, pushed mainly by the residential building sector that is expected to reach around 48% employment change (Figure 7). In addition to that, labor hourly construction occupations is expected to have higher demand rates (Figure 8), specially for occupations like brickmasons (43.7%), insulation (39.4%), carpenters (33.8%), and laborers (32.1%). 60.0% Projected change in construction employment, by sector ( ) 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 48.2% 32.6% 30.2% 29.0% 26.8% 26.1% 23.1% 17.1% 16.9% 11.1% 28.8% 11.3% Figure 7 Projected change in construction employment by sector 2012 to 2022.

12 Source: U.S. Bureau of Labor Statistics, Employment Projections. Projected change in construction employment, by occupation ( ) 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 43.7% 39.4% 33.8% 32.1% 30.5% 30.2% 29.3% 27.8% 27.3% 25.9% 23.2% 23.0% 17.4% 12.8% 9.5% 28.8% 11.3% 0.0% Figure 8- Projected change in construction employment by occupation from 2012 to Source: U.S. Bureau of Labor Statistics, Employment Projections. 1.2.Current construction workforce trends in Florida Even though the construction industry has had a significant increase nationwide, some states have been feeling or will feel the consequences of the labor work shortage more intensively. The AGC s report for the State of Florida showed that 95% of construction companies expect to hire additional hourly craft professionals and 78% expect to hire salaried professionals in the next 12 months. However, all companies are already having problems filling available positions. The shortage in the State is more problematic for hourly craft professionals, such as carpenters (100%), concrete workers (90%), equipment operators (78%), and electricians and ironworkers (67% each). Project managers/supervisors (77%) and engineers (58%) are the salaried occupations with the highest demand from industry (Figure 9;Figure 10).

13 COMPANIES REPORTING TROUBLE FILLING HOURLY POSITIONS, BY OCCUPATION (2015) 120% 100% 80% 60% 40% 60% 100% 49% 90% 43% 78% U.S. Florida 67% 67% 53% 40% 30% 44% 44% 40% 20% 0% Carpeters Concrete workers Equipment operators Electrician Iron workers Mechanics Laborers Figure 9 Comparison of the reported problems for filling hourly position in the State of Florida and U.S. Source: Associated General Contractors of America COMPANIES REPORTING TROUBLE FILLING SALARIED POSITIONS, BY OCCUPATION (2015) U.S. Florida 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 28% 58% Engineers 31% 52% Estimating Professionals 50% 77% Project Managers/Supervisors 16% 36% Quality Control personnel 10% 21% Safety Professionals Figure 10 - Comparison of the reported problems for filling salaried position in the State of Florida and U.S. Source: Associated General Contractors of America The problems to fill positions are directly connected to the very low supply rates for construction-related positions in Florida. According to the Florida Department of Economic the

14 work demand for some occupations is outpacing the available workers supply. For example, first-line supervisors of construction trades and extraction workers have a supply gap that reaches almost 1500 vacancies statewide. Sheet metal workers, plumbers, drywall installers and roofers also have a short-term demand that outpaces the supply of over 150 jobs (Figure 11). On the other hand, some occupations that currently have a small supply gap, such as stonemasons, insulation workers and plasterers, are expected to growth impressively in the coming years (Figure 12). Occupation Total Supply Short term demand Supply gap or overage Ratio of supply to demand Current year employment First-line supervisors of construction trades and 685 2, ,563 extraction workers Sheet metal workers ,826 Plumber, pipefitters, and steamfitters Drywall and ceiling tile installers ,555 Roofers ,912 Tile and marble settlers ,945 Carpet installers ,352 Plasters and stucco masons ,063 Insulation workers, floor, ceiling and wall ,167 Glaziers ,903 Stonemasons Figure 11 - Supply gap of construction occupations in the State of Florida. Source: Florida Department of Economic Opportunity

15 60% 50% Projected Employment Growth Florida Employment Growth U.S. Employment Growth % 51.90% 40% 30% 25% 29% 39% 32.20% 28.00% 28.30% 32.10% 23.40% 20% 10% 8.00% 6.40% 12.80% 18.60% 13.70% 12.00% 6.70% 5.20% 0% Construction and building inspectors Carpenters Roofers Brickmasons / Blockmasons Electrician Plumber Shet Metal Worker Drywall and Ceiling Tile Installers Reinforcing Iron nd Rebar Workers Figure 12- Comparison of the construction-related employment growth for the State of Florida and U.S. average. Source: Employ Florida Marketplace As a matter of fact, the construction industry has been showing an impressive growth in the State of Florida lately. According to the Florida Department of Economic Opportunity, the State added around 25,000 new construction jobs over the last year, an increase of 5.7% compared to the 3.1% average growth of all industries in the State and higher than other populous States, such as California and Texas (Figure 13;Figure 14). Employment growth also had significant variations in different metro areas of the State of Florida over one year, with the most densely populated metropolitan areas such as Orlando, Jacksonville, and Miami showing job growth rates over 10% (Figure 15;Figure 16;Figure 17).

16 Figure 13 - Construction employment by State in October 2016 Source: Associated General Contractors of America July June July June 2016 to July 2016 July 2015 to July 2016 Industry Title Level Percent Level Percent Total Nonagricultural 8,229,10 8,261,80 7,981,90-32, % 247, % Employment Construction 459, , ,400 2, % 24, % Construction of Buildings 92,100 92,600 89, % 2, % Heavy and Civil 55,800 57,100 53,300-1, % 2, % Engineering Construction Specialty Trade Contractors 311, , ,700 4, % 19, % Building Equipment Contractors 139, , ,500 1, % 9, % Figure 14 - Construction employment growth in Florida (not seasonally adjusted). Source: Florida Department of Economic Opportunity Area Jun-16 May- 16 Jun-15 Over-themonth Change Over-the-year Change Leve l Percent Level Percen t Statewide 462, ,60 437,20 1, % 25,50 5.8% Orlando- Kissimmee- Sanford MSA 70,200 70,100 60, % 9, %

17 Miami- Miami Beach- Kendall MD 45,800 46,600 40, % 5, % Punta Gorda MSA 3,700 3,600 3, % % Tampa- St. Petersburg- Clearwater 69,600 69,100 65, % 4, % MSA Sebastian- Vero Beach MSA 3,500 3,500 3, % % Naples- Immokalee- Marco Island 14,300 14,200 13, % % MSA Palm Bay- Melbourne- Titusville 11,600 11,500 11, % % MSA Ft. Lauderdale- Pompano Beach- 42,800 43,400 41, % 1, % Deerfield Beach MD Cape Coral- Ft.Myers MSA 23,400 23,400 22, % % North Port- Sarasota- Bradenton 21,000 21,100 20, % % MSA Port St. Lucie MSA 8,800 8,600 8, % % Lakeland- Winter Haven MSA 12,200 12,300 12, % % West Palm Beach- Boca Raton- Delray Beach MD 31,100 30,200 30, % % Figure 15 Construction employment growth by metro areas in Florida Source: Florida Department of Economic Opportunity Figure 16 - Construction employment in October 2016 by metro areas Source: Associated General Contractors of America

18 Figure 17 - Florida Job Growth by metro area for mining, logging and construction category. Source: Florida Department of Economic Opportunity. As several significant projects are intensifying in the State of Florida, the National Center for Construction Education and Research estimates that the State will need to add around 50,000 new jobs by the end of 2018 which, successively, will worsen even more the reported labor shortage. Projections indicate that the State of Florida will experience a construction employment growth above the nationwide average (Figure 18) and significantly above the average employment growth of all industries in the State (Figure 19). Most construction-related

19 occupations, especially the hourly craft jobs, will outpace the average growth for all occupations in the State of Florida. (Figure 20; Figure 21). Figure 18 - Project change in construction employment by state from 2012 to Source: Center for Construction Research and Training. Industry Employment Change Total Percent (%) Total, All Industries 8,634,086 9,733,310 1,099, % Construction 419, , , % Construction of Buildings 87, ,756 28, % Heavy and Civil Construction 52,293 63,113 10, % Specialty Trade Contractors 280, , , % Figure 19 Projection of construction employment for 2023 in the State of Florida. Source: Florida Department of Economic Opportunity and Bureau of Labor Market Statistics

20 Employment change for construction hourly craft occupations in Florida ( ) Electricians Sheet Metal Workers Roofers Plumbers Carpenters Drywall and Ceiling Installers Painters and Maintenance Construction Trades Helpers Structural Iron and Steel Workers Crane and Tower Operators Roofer Helpers Plasters and Stucco Masons Reinforcing Iron and Rebar Workers Solar Photovoltaic Installers Insulation Workers: floor, ceiling, wall Cement Masons and Concrete Finishers Stonemasons Mechanical Insulation Workers Brickmasons and Blockmasons Brickmasons Helpers Total, All occupations 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Figure 20 Employment projections for construction hourly craft occupations in the State of Florida. Source: Florida Department of Economic Opportunity and Bureau of Labor Market Statistics

21 Electrical Engineers Architectural Managers Construction Managers Civil Engineers Cost Estimators Total, All occupations Employment change for construction salaried occupations in Florida ( ) Urban Planners Landscape Architects 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Figure 21 Employment projections for construction salaried occupations in the State of Florida. Source: Florida Department of Economic Opportunity and Bureau of Labor Market Statistics Summary: Several signs of a tightening labor market were already being noticed in U.S. since 2001, which includes the falling unemployment rate, the rising number of job quitters, the number of job openings outpacing the number of hires, and the historically low participation of the American labor force. The high employment growth rate based on the national economic recovery combined with the low supply levels may be the core problem for the current workforce shortage. The construction industry is expected to increase around 28.8% of its labor force nationwide, pushed mainly by the residential building sector. While the average employment growth for all sectors in the country will remain around 11.3%. In 2015, construction in Florida contributed $41 billion, representing 4.6% of the state s GDP of $883 billion.

22 The problems to fill positions are directly connected to the very low supply rates for construction-related positions in Florida. The State of Florida added around 25,000 new construction jobs in 2015, an increase of 5.7% compared to the 3.1% average growth of all industries. Construction employment in Florida in July 2016 totaled 457,300, an increase of 6.1% from July 2015, but 34% decrease from the state s peak in June The State of Florida is expected to add around 50,000 new construction-related jobs by the end of Almost all construction-related occupations will have employment growth above the State average, with significant increases for hourly craft jobs.

23 References Associated General Contractor of America (AGC) Workforce Survey Result: National Results. Retrieved December 09, 2016, from Associated General Contractor of America (AGC) Workforce Survey Result: Florida Results. Retrieved December 09, 2016, from Associated General Contractor of America (AGC). October 2016 State Construction Employment. Retrieved December 09, 2016, from state-construction-employment Associated General Contractor of America (AGC). October 2016 Metro Construction employment. Retrieved December 09, 2016, from metro-construction-employment Associated General Contractor of America (AGC). The Economic impact of construction in the United States and Florida. Retrieved December 09, 2016, from Bureau of Labor Statistics Employment Projections. Data extracted on: September 15, 2016 CPWR. Employment trends and projections in construction: quarterly data report. (2015). Retrieved December 09, 2016, from date.pdf Employ Florida Marketplace. Job Market Trends. Retrieved December 09, 2016, from Emrath, P. (2014). Builders See Shortages of Labor and Especially Subcontractors. National Association of Home Builders (NAHB). Retrieved December 09, 2016, from Emrath, P. (2014). Even More Remodelers Now Report Labor Shortages. National Association of Home Builders (NAHB). Retrieved December 09, 2016, from Florida Education & Training Placement Information Program (FETPIP). Retrieved December 09, 2016, from

24 Florida Department of Economic Opportunity (DEO). Florida s October Employment Figures Released. (2016). Retrieved December 09, 2016, from Florida Department of Economic Opportunity (DEO). Florida Job Growth over-the-year by metro area and construction employment. (October 2016). Retrieved December 09, 2016, fromhttp://lmsresources.labormarketinfo.com/maps/ces/jobgrowth.asp?growthtype=l&ser ies= Florida Department of Economic Opportunity (DEO). Employment projections. Retrieved December 09, 2016, from Levanon, G.; Paterra, M. (2014). Expected Labor Shortages Among Skilled Labor. The Conference Board. Retrieved December 09, 2016, from Levanon, G.; Paterra, M. (2015). Strong Job Growth, But in Which Industries? The Conference Board. Retrieved December 09, 2016, from Trading Economics (2016). Job vacancies. Retrieved December 09, 2016, from Trading Economics (2016). United States Unemployment rates. Retrieved December 09, 2016, from U.S. Department of Labor, Employment and Training Administration. All employees, thousands, construction, seasonally adjusted. Retrieved December 09, 2016, from ew=data&include_graphs=true