By Alicia Wallace
The Denver Post
A shortage of skilled workers is stifling the construction industry’s rebound from the gutting it took during the Great Recession, potentially stymieing the boom in Colorado.
The shortage is a problem that has vexed one of Colorado’s largest masons for three years. Since 2012, Gallegos Corp. has weighed in at $40 million and 400 employees — exactly half its pre-recession size — and has maxed out in its ability to take on more work in the construction crane-laden Denver metro area.
“We can’t grow,” said Dave Little, chief business development officer for the Edwards-based masonry contractor. “The only way we’ll be able to grow any more is workforce.”
To add manpower, Gallegos has hired recruiters; sent workers to Florida to receive accreditation at the National Center for Construction Education and Research; established an apprenticeship program; shared crews with competitors; and kicked $100 to $250 to employees who successfully referred additional workers.
Little estimates that his firm has spent “several hundred thousand” dollars in its hiring efforts, which might start paying off this year. Gallegos has added 70 employees, a figure that translates to about $7 million in revenue.
“Are we chasing that growth? Yes, we are,” he said.
Construction is one of Colorado’s fastest-growing employment sectors. During the first quarter, the industry gained 10,200 jobs, an increase of 7.3 percent, from a year earlier, according to the Colorado Department of Labor and Employment.
Preliminary estimates for July show that construction hires are up 8,100 from that month last year, but the new jobs aren’t enough to keep pace with development that is moving at a breakneck pace, industry experts said.
“There’s a high demand for carpenters, laborers, cement masons, right down through the other trades,” said Michael Gifford, president and CEO of the Associated General Contractors of Colorado. “That’s just a consequence of some pretty good growth, which is good news.”
But the state’s construction firms are still playing catch-up after enduring a 40 percent reduction in craft labor positions during the recession, he said.
“Those existing people with experience, they moved on and found other things,” he said. “And some of them aren’t coming back.”
Construction companies are hitting stumbling blocks as they try to bolster depleted crews, the Associated General Contractors of America said Thursday in conjunction with the release of the organization’s annual workforce report.
The vast majority of firms surveyed — 86 percent of nearly 1,400 — say they’ve had trouble filling positions.
Among the reasons cited for the shortage: immigration policies that limit those eligible for work visas; unemployed laborers dissuaded by the industry’s volatility; and the disappearance of high school shop classes.
Construction also is not benefiting from any spillover from cuts in the energy industry, AGC officials said. Unemployed oil and gas workers appear to be waiting for potential restarts for their six-figure jobs on the fields.
The smaller employment pool has forced companies such as PBG Builders in Nashville, Tenn., to take a hard look at the projects for which it bids, said John Finch, the company’s CEO and co-owner.
“We’re just pulling our horns back in and bidding less work,” Finch said.
AGC members said the pipeline of new workers is insufficient and that unless changes are made across the local, state and federal levels — from investment in education to immigration reform — a construction slowdown could send negative ripple effects throughout the economy.
Finch said he thinks that increasing pay rates should be part of the equation; however, in a market under pressure to drive prices down, there will have to be a balance.
In Colorado, construction wages have climbed slowly since 2009, registering annual gains of 0.01 percent to close to 3 percent, according to data compiled by Brian Lewandowski, associate director of the Business Research Division at the University of Colorado’s Leeds School of Business.
The annual average construction salary in Colorado was $53,664 at the end of last year, up just over 5 percent from 2013.
But for some skilled workers, the pay isn’t keeping up with the skyrocketing costs of living in the state.
Joe Moore, a 45-year-old concrete carpenter, left a $42.43-an-hour union position in California when he moved to Durango with his family after his wife landed a new job.
“I got here and lost about $15 an hour,” he said. “I’ve been doing this for 26 years. I don’t even make a dollar for every year I’ve done this.”
The pay and sometimes unsteady and unwieldy hours — including a 17-hour day that started at 1:30 a.m. — have been the meat of many late-night talks between Moore and his wife. The work is taxing on his recently repaired shoulder, and the money might not be enough to help get their two daughters through college.
“I don’t know a single soul that would move here for this wage. They would laugh,” he said. “I hear the ‘You’re not in California anymore,’ but, yeah, it costs as much to live here as it does there.”