Prairie Business Magazine - Construction 2017

Construction Industry Rebounds After Recession

Shawntera Hardy 2017-06-06 13:05:24

The Minnesota construction sector was hit harder than any other industry during the last recession, losing nearly 38,000 jobs. By the time the dust had settled, an astonishing 32 percent of the industry’s jobs in the state had vanished. The good news is construction is staging a remarkable comeback. Industry employment is at the highest level in a decade in Minnesota and just 11,000 jobs shy of its record high. A booming economic recovery combined with high-profile projects in recent years, including the new U.S. Bank Stadium in downtown Minneapolis and the 11-mile Green Line light rail project, helped jump-start construction into one of the fastest-growing industries in the state. Construction employment in Minnesota expanded at more than triple the pace of jobs overall in the state during the past 12 months and nearly double the national rate. Growth won’t be slowing any time soon, with the industry expected to add another 10,300 jobs by 2024. That doesn’t include thousands of replacement openings that will need to be filled because of retirements or people leaving for work in other fields. Clearly, construction is on a roll and an important part of the Minnesota economy. According to an estimate by the Associated General Contractors of America last year, the construction sector contributes $14 billion to the state’s gross domestic product and accounts for $7.3 billion in wages and benefits annually. The industry is attractive to workers because it pays median hourly wages of nearly $18 an hour, compared with $14 an hour for jobs overall. Another desirable feature: Just 20 percent of construction jobs require more than a high school degree, compared with 36 percent of jobs for all industries the state. Education requirements in construction tend to be low because the industry follows a training model that is different from other industries, not because the jobs are low-skilled or low quality. For example, many companies offer on-the-job training and apprenticeships. Help Wanted Ironically, an industry that was hemorrhaging jobs just a few years ago is now struggling to find workers. Construction industry officials in Minnesota say finding enough skilled labor will be their biggest challenge in coming years, with more than 26,000 new and replacement jobs needing be filled by 2024. A couple of factors are at play. One is that the industry is aging and will experience increased retirements in the next decade. A second factor is that many high schools and colleges have dropped vocational programs that fed the industry pipeline in the past. That trend, combined with parents who are encouraging their children to pursue four-year degrees, means fewer young people are gaining construction skills these days or showing interest in the field. One of the keys to addressing the industry’s labor challenge is more recruitment of people of color and women. While the industry has made progress in becoming more diverse in recent years, men still comprise 86.4 percent of the Minnesota construction workforce. Women account for 13.6 percent of construction workers, while people of color comprise just 4.8 percent of the workforce. Construction officials acknowledge that more work needs to be done to build a more diverse workforce. A number of efforts are underway, including Trade Up, a collaboration of trade groups, construction companies and other stakeholders that enables low-income students at Saint Paul College to train for careers in the construction trades. The state’s Pathways to Prosperity Program also supports initiatives that train women, people of color and other underserved groups for work in construction and other careers. In another effort, Construction Tomorrow sponsors career fairs around the state to give high school students a taste of what it’s like to work in the industry. Minnesota’s construction sector is healthy and growing. In order to make sure that success continues, the industry must invest in attracting a more diverse workforce. Hiring people from diverse backgrounds isn’t just good for business, it’s good for Minnesota. PB

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