The construction industry is booming in Utah; with 24,241 housing permits issued in the state in 2018—the most in 12 years—Utah led the nation in homebuilding, according to www.kuer.org.
Although the boom offers opportunities for contractors, it is accompanied by a worker shortage.
“You could put it in the historical low category,” says Dejan Eskic, a research associate at the Kem C. Gardner Policy Institute.
During the recession, workers left the industry as building slowed. Eskic says at its peak in 2007, Utah’s construction industry had 104,612 jobs; by 2011, that number fell to 66,383—a loss of 36.5%. Although the number of workers has since increased to 105,534, the amount of building projects has outgrown it.
This poses a challenge for contractors such as John Hadfield of Hadco Construction, who are having to constantly work to keep employees as competition heats up. Hadfield says he recently had a five-man crew poached by a rival contractor, who had stopped by a job site several days in a row with increasing offers.
“It went from being one more dollar an hour what they were making to three or four dollars an hour,” he said. “And then they gave them a signing bonus if they’d leave the next day, so the whole crew walked off.”
To prevent it from happening again, Hadfield says he gave all 550 of his employees multiple raises this year. Some of his crews have received three raises, in addition to healthcare and a retirement plan.
Utah’s labor shortage also is increasing housing costs Although more than 60% of all new construction projects in Utah was housing in 2018, the state still faces a shortage of about 54,000 units, which means higher housing prices; in Salt Lake County, the median sales price of a new home in 2018 was $418,376—up 61% from 2010.
The worker shortage also is causing concerns regarding building safety. Les Koch, building services manager for Salt Lake City, says with so many inexperienced contractors coming to the industry, many do not know the building codes or might try to avoid the inspection process altogether. With 17 inspectors and close to 250 inspections on the docket each day, Koch says his office does not have the ability to stop by every job site in the city.
Rich Thorn, president and CEO of the Associated General Contractors of Utah, said the organization is focused on recruiting new talent and better communicating the benefits of working in the industry.
“If we can convince more people, that the construction industry is a career industry, not just a job, you’re going to see more people wanting to be involved in this industry,” Thorn says.
