Originally published in the Valley News on 2/8/20

WEST LEBANON — Jay Preston is getting ready to break ground next week on the construction of a three-bedroom, 3,000-square-foot ranch-style home in Newport. The Grantham builder, who’s been building and renovating homes in the Upper Valley for 20 years, is facing a familiar problem.

He can’t find enough workers to join him on the six-month project.

“I have myself, an apprentice carpenter and a laborer,” Preston said last week. “I need another carpenter. I pay $35 to $40 an hour. And I can’t get any. I’m going to be working flat-out seven days a week. I’ve got to make it up somehow.” 

The construction industry is facing a shortage of workers. Excavators, carpenters, roofers, drywall installers, plumbers, electricians, heating and ventilation contractors and painters — the orchestra of trades pulled together and overseen by a general contractor — are in critically short supply in the Upper Valley, and across the country, as a historic low in unemployment and decade-long building boom has tightened the workforce.

How much tightened? The National Association of Home Builders estimates that there are about 9,500 open positions in the construction industry in New England. Nationally, the association estimates that as of last September, the last month for which it released data, there were 338,000 open positions in the construction industry, up from 299,000 open positions a year earlier.

To put that into context, that’s more than half the size of the population of Vermont and 24% of the population of New Hampshire.

“The last two to three years have been the worst. Last summer was probably the worst” in finding construction workers, said Dan Smith, a principal and senior project manager of general contractor H. P. Cummings Construction Co. in Woodsville.

With 50 full-time employees, it’s one of the largest construction companies in the Upper Valley and is overseeing the $8 million renovation of the Woolson Block on Main Street in downtown Springfield, Vt., into 15 affordable housing apartments.

“Whatever the subcontractors are going through, we are going through as well,” he said. “From laborers starting out to senior project managers, we’re having the same issue with all of them.” 

From famine to feast 

Labor statistics swing widely with the state of the economy and the current boom times for those in the building trades contrasts sharply with the shape of the industry a decade ago. That’s when the Great Recession, triggered by the mortgage crisis in housing, wiped out hundreds of thousands of construction jobs.

The situation is just the opposite today, according to building industry professionals.

When general contractor Trumbull-Nelson was soliciting bids for subcontractors in 2018 for the $8.5 million project to renovate the Goddard Block on Pleasant Street in Claremont into 36 affordable housing units, it subcontracted with Griffin Electric of Holliston, Mass. — 120 miles away — for the electrical work.

That’s because as important as being the lowest bidder is the assurance that there will be enough workers to handle the job required, and that has been an increasing challenge in recent years. “One of our main qualifications for subcontractors these days to work on our projects is their ability to staff the job with the required manpower,” said Tony Instasi, vice president and senior project manager at Trumbull-Nelson, now based in West Lebanon.

Then, about halfway through the 15-month Goddard Block project, there was the day last March when “we almost lost our roofer,” recalled Jay Barrett, a White River Junction architect who designed the renovation.

Barrett said that some subcontracting trades, such as roofers, are increasingly reliant upon temporary foreign workers on H-2B visas to staff their work crews because they are unable to find local people to fill the jobs. 

This resulted in the project nearly grinding to a halt last spring when the roofer said he was running into delays in obtaining visas for guest workers.

“He was ultimately able to straighten (it out) but it was almost a panic situation,” Barrett said.

The deficit in construction workers is not an overnight development and stretches back to even before the 2007-09 recession and its aftermath, building industry professionals said. 

Even at the peak of the pre-2007 housing market, builders were already facing problems hiring workers as the first wave of baby boomers in the skilled trades began retiring.

The biggest construction program in the Upper Valley is, not surprisingly, at Dartmouth College in Hanover, where two large structures, the $200 million Center for Engineering and Computer Sciences and $80 million Arthur L. Irving Institute, are both being built on the west side of campus amid the Thayer engineering school and Tuck business school.

Given the scope and adjacency of the projects, Dartmouth has hired New York-based Turner Construction as the general contractor on the project, the first time the college has ever used the giant national construction firm, said John Scherding, associate vice president for planning, design and construction at Dartmouth. (A 70,000-square-foot indoor athletic practice facility being built by Vermont-based Engelberth Construction is also going up near the Boss Tennis Center and is expected to be completed by March.)

Although large national and regional general contractors like Turner and Engelberth have less trouble staffing their ranks, that’s not always the case with the dozens of subcontractors on the projects who are stretched thin from taking on other jobs as they are wont to do, according to Scherding. 

“There are plenty of occasions where we are leaning hard on them to maintain schedule but we are doing more of that than five years ago because the market is so tight,” said Scherding, who has worked at Dartmouth for 18 years.

He said that the 30-year average annual increase in construction costs is 3.1%, but is now running between 5% and 6% per year, “so it’s approaching double what it was over the 30-year average.” 

He said that the higher pay construction workers earn is part of the reason.

Aging out 

By and large, the industry is no longer a young man’s game (and despite women entering the construction fields, the trades are still overwhelmingly populated by men). Jeff Page, owner of home builder Housewright Construction in Newbury, Vt., said the average age of his workers in the field is 48.

Page attributes the shortage in younger workers to a shift by high schools over the past couple of generations away from promoting trade schools as leading to a good career path for graduates. This has especially been the case in the carpentry trade, where “it’s almost seen as an undesirable job” alongside those in technology, for example.

To erase that prejudice, Page’s company, which employs about 20 people and builds homes within a 70-mile radius of Newbury, has been pairing students from the building trade program at River Bend Career and Technical Center in Bradford, Vt., with his own crews to give them hands-on experience — and a pool of potential future employees.

“What people don’t understand is that the carpenter has to be skilled in the whole process,” he said.

Page is actually lucky: His employees are younger than the industry average, which is 52 years old, said Josh Reap, president of the Vermont and New Hampshire chapter of Associated Builders and Contractors.

“The No. 1 reason for (the shortage of construction workers) is that we’ve done such a good (job) of having kids go to college for generations now that we’ve neglected the trade careers that are right here at home,” Reap said. “Construction is a great pathway to the middle class for anyone who wants to work.” 

Heavy equipment operators, he points out, can earn $100,000 a year “with benefits and have no college debt.” 

“There’s a stigma that construction is a low-wage, low-technical job,” Reap said. “But today’s construction site involves drones and computers.” 

He estimates that there may be a shortage of 5,000 or more construction workers in New Hampshire alone. “You have men and women who have been doing this for 30 years now and are ready to retire. We’re trying to get out the message that this is a high-tech, high-wage industry now.” 

How high-wage? Jody Perkins, co-owner of HVAC contractor ARC Mechanical Contractors in Bradford, Vt., said that a foreman earns between $30 to $35 an hour and he has technicians earning upward of $80,000 annually.

The 70-employee company recently tapped grant funding to help pay for training of new HVAC technicians, much as a nonprofit would. “That was a first for us,” he said. “We’re trying to think outside the box.” 

H.P. Cumming’s Smith believes “we’re starting to see some movement” in persuading young people that the construction industry is not like that of their grandparent’s or even parent’s generation and most reputable companies now also offer benefits such as insurance and 401(k) plans, something that they hadn’t done.

“It used to be construction had the reputation of come in, pay people a rate and they don’t get benefits. A few still don’t, but that’s mostly not the case any longer.” 

While there has been a boom in construction for a decade, at some point the economy will slow, raising the question of whether construction industry workers would then find themselves where they were when the last recession hit, with few job sites to join.

Smith acknowledges there will be slowdown in building but “whether it’s this year or five years I’ve no idea.” The difference this time, he said, is “there are a lot of people running so hard for so long that they will like to pull back a bit. We see it. I think the baseline is we could still use a few more people.” 

John Lippman can be reached at jlippman@vnews.com.

Originally published in the Valley News on 2/8/20