May 19, 2015

Oregon contractors fight to get plumbers, electricians, carpenters

EUGENE, Ore. — By most accounts, Lane County's construction market is booming.

From January to early May this year, more permits for single-family homes were issued in Eugene than that same period in any year since 2007, including a 37 percent jump from 2014. Nine new commercial and industrial projects with values above $1 million each have been proposed in the city so far, the most this early in the year since 2004.

Springfield home-building activity is up 27 percent over last year, based on permit activity.

But while local builders seem busier than any time in recent memory, some small, midsize and large construction firms say they could be doing more.

A shortage of skilled labor in fields such as plumbing, carpentry, electric work and tile laying means local companies are often competing with each other to hire from a considerably smaller list of local subcontractors than existed before the Great Recession.

“After everything kind of crashed in 2008 and 2009, a lot of the labor pool went into different occupations or left town,” said Shallum Bivens, a small-scale builder and owner of Springfield-based Nordic Homes.

After taking out a total of 10 permits to build Eugene houses from 2010 to 2013, he built six homes in 2014 and has received or applied for four permits so far this year. Business is good, Bivens said, but could be better.

“Now that there's an upswing, the (labor) shortages are driving up costs across the board,” he said. “If there was more of a quality, skilled labor force, we could produce more homes.”

U.S. Bureau of Labor Statistics estimates show a 23 percent decline in the total number of Lane County construction firms between 2008 and 2014, dropping from 1,171 to 898. Those figures cover everyone from large entities like Knife River Corp. and Wildish Construction to one-person subcontracting companies.

The shortage is affecting larger companies than Nordic this year.

John Hyland Construction is wrapping up work on the massive Hub on Campus student housing complex on East Broadway this summer. The Hub project, the new Roosevelt Middle School and a series of industrial buildings in Springfield will keep Hyland's employees busy this summer.

But while the pace of work today is closer to the mid-2000s boom than the depths of the recession, employment at Hyland hasn't clawed back to pre-recession levels, Hyland Vice President Shaun Hyland said.

The company relies largely on subcontractors, but also employs drivers, concrete mixers and an administrative staff.

“We got really busy last year, we were just really humming along, and it was hard to basically get our company up to pushing 70 employees,” Hyland said. “Ten to 15 years ago, we'd have 100 people working, and it wasn't hard to find them. ... Frankly, we couldn't figure out where all the workers were.”

But after asking other construction companies and subcontractors, Hyland thinks he knows the answer.

“What I've been told anecdotally is that Intel, with its boom, is just taking all the workforce,” he said. The tech giant has been working on a mammoth, $6 billion campus in Hillsboro since 2010, which is due to wrap up next year.

“Intel, Nike, those huge campuses (in the Portland area), they're doing projects that are in the billions. Think about the labor that takes,” Hyland said.

State employment data back it up.

Construction employment rose more than 21 percent in the Portland metro area between 2010 and 2014, Oregon Employment Department data show, a net gain of 9,800 workers.

Lane County has seen just a 5.7 percent employment rise in construction over the same period, gaining just 300 workers.

Even Deschutes County, with about half of Lane County's population, has added more than three times as many construction workers as Lane County over that time.

The local labor squeeze dates back before the recession, said Ed McMahon, executive vice presidents of the Home Builders Association of Lane County. It's not just a local issue, either.

“Us baby boomers are getting a bit too old to be crawling around on trusses, and we don't have a young workforce to replace us,” McMahon said.

Local construction businesses are increasingly trying to reach out to local high schools to try and draw students into the field.

Though construction jobs average about $8,000 per year more than the average private sector job in Lane County, according to BLS data, “It has become sort of a hidden career, where it didn't used to be,” Lane Workforce Partnership executive director Kristina Payne said.

Until the labor pool corrects itself, local builders like Future B Homes will have to reconcile an uptick in projects with their subcontractors' increasingly tight schedules this summer.

“We're all using a lot of the same guys, we're all competing to try to get them on our job sites,” Future B sales manager Mandi Butler Craner said. “How do you get one crew to be in three places?”