Old workers return, new hires arrive, as construction jobs grow

LOS ANGELES Sat May 3, 2014 7:16am EDT

Carpenters frame a home at a residential construction site in the west side of the Las Vegas Valley in Las Vegas, Nevada April 5, 2013. REUTERS/Steve Marcus

Carpenters frame a home at a residential construction site in the west side of the Las Vegas Valley in Las Vegas, Nevada April 5, 2013.

Credit: Reuters/Steve Marcus

LOS ANGELES (Reuters) - When the U.S. economy crashed in 2008, following the implosion of the housing market, Dave Klein's southern California construction company almost folded.

Overnight, he went from employing 40 construction workers to four. Some returned home to El Salvador, others to Mexico. Several left the state to find work in pork and chicken factories in the Midwest.

But in the past two months, Klein says, some of them have returned as he has started hiring again - moves that reflect a recent trend in the U.S. construction industry as the American economy continues to pick up steam.

"There is a little bit more money out there and there are a lot of apartments being built," Klein said. "So things are getting a little better. Some of these guys went into the restaurant industry, but they are coming back. Or friends of friends are."

The U.S. construction industry saw its largest gain in jobs since the start of this year, and the highest number since 2009, according to preliminary figures from the Bureau of Labor Statistics on Friday.

The construction sector added 32,000 jobs in April, the fourth straight month of gains over which 124,000 building site jobs have been created. The gains were part of an unexpectedly bright jobs report which saw the overall unemployment rate drop from 6.7 percent to 6.3 percent as U.S. employers added 288,000 jobs in April, well above estimates.

The construction industry was obliterated in the wake of the housing crash. Of the 8.2 million jobs lost during the Great Recession, 2.3 million were in construction, according to the U.S. Bureau of Labor Statistics.

In April 2006, there were over 7.7 million construction jobs. By April 2011, the number was under 5.4 million. Now it is back up to 6 million, still a long way below the pre-recession boom, but on an upward tick.

Yet the demand in construction jobs is not just being met by former workers returning to the fold, according to company bosses and industry analysts. Many of these former workers have been lost forever, forcing companies to hire and train new, inexperienced employees.

Jeff Dworkin, who runs a construction company in Dallas, said in his region a lot of carpenters and joiners left the country after the crash, or moved to the Gulf oil fields where the work was plentiful and the money is good.

"So we're seeing folks being added to the industry but most are brand new and require lots of training," Dworkin said. "What we are seeing are new hires who have no experience in electrics or plumbing."

The National Association of Homebuilders said last month that builders in several parts of America are concerned about a lack of skilled labor, because so many construction workers found new careers in the past six years.

Others never left the industry but spent much of the past six years looking for work.

Bill Simpson, a superintendent for Los Angeles-based Hill Construction, said he started to get busy again about a year ago.

"But there were weeks when we didn't have work at all. I was basically on the phone each night scrounging for work."

At the height of the construction boom, it was single-family homes that provided most of the work. Now new residential construction is dominated by apartments being built for renters, reflecting the growth in renting and decline in homeownership rates, according Jed Kolko, chief economist for Trulia, an online real estate data firm.

"There is a construction boom in many metro areas, and it is overwhelmingly multiunit buildings for rent," Kolko said.

(Reporting by Tim Reid; Editing by Lisa Shumaker)

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Comments (1)
lotuslandjoe wrote:
All you have to do is look at the labor market participation rate to see that although things might be rosy in SoCal for a few construction companies, things are still pretty stinky for all of America.
Also, the national American unemployment statistic is manipulated so badly that it doesn’t speak the truth anymore.
Government reported real unemployment is still at 12.3%;

Memo to Reuters news staff: if you dig a little deeper, you’ll find that it’s almost double that in most areas of the country. But that would take a little work.

May 03, 2014 10:49am EDT  --  Report as abuse
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