It’s Good Times for Contractors
The construction business was in such a deep slump a few years ago that contractor Ernie Ritchie was ready to abandon the industry and find a new way to make a living.
But on a recent weekday, Ritchie was busy supervising his crew of seven plasterers at the site of a new movie theater in Pasadena while preparing to take on new jobs in Simi Valley and Dana Point.
“It’s like night and day,” said Ritchie, 36, whose revenue is up 10% from last year. “There is a job on every corner you look at. I’m booked probably through March.”
After suffering through much of the decade, California’s construction industry is booming, with overloaded contractors turning down work and companies competing for skilled workers to build everything from tract homes to office buildings to theme parks.
After lagging many other industries during the state’s economic recovery, construction has shifted into high gear just as other businesses--such as technology and manufacturing--show signs of beginning to slow down.
Based on October employment statistics compiled by the state, the pool of construction workers swelled by 54,000--or 9.5%--on a year-over-year basis. Nationwide, the expanding number of construction workers has helped offset a decline in the number of manufacturing jobs.
The rise in California construction activity this year--up about 14% above 1997 levels as measured by building permits--has rippled into related industries, boosting demand for everything from concrete to carpeting.
But perhaps most important, the state’s growing construction trade--which saw employment plummet by nearly 120,000 people during the early 1990s--has once again become a significant source of new, relatively high-paying jobs for blue-collar workers. Many of the same California workers who left or commuted out of state to build casinos in Las Vegas or tract homes in Phoenix have returned, industry observers say.
“Virtually all of them have come back now,” said William Rogers, business manager for Plasterers Local 200, which can boast nearly full employment for its Southern California members.
And despite a recent cooling off in real estate activity, there are still plenty of projects in the pipeline to keep construction crews busy for some time, contractors say.
Next year, for example, projects like the $2.4-billion Alameda Corridor--which will speed train traffic between downtown Los Angeles and the ports--and the expansion of Disneyland in Anaheim will kick into high gear and begin to generate jobs for iron workers, cement masons and crane operators. Construction is also scheduled to start next year on the long-delayed Playa Vista project near Marina del Rey.
“Things have tightened up,” said Robert Rivinius, chief executive officer of the California Building Industry Assn. “Getting subcontractors to come out and perform in a timely manner has gotten more difficult for builders.”
Demand has been heaviest in Northern California, which led the state out of the recession and where developers have broken ground on scores of office parks, downtown hotels and high-rises, said Bill Johnstone, western regional director for the giant construction firm Bovis.
“From San Jose to San Francisco, it’s a hot market right now,” said Johnstone, whose company is involved in a huge expansion project at San Francisco International Airport as well as construction of a new Four Seasons hotel in downtown San Francisco.
Construction activity in Southern California, meanwhile, has picked up speed in the last year.
“It really happened pretty fast,” said Rogers of the plasterers union. “Eight months ago, we saw the signs of it beginning. When the rains stopped, it all just broke loose.”
Richard Slawson, executive secretary of the Los Angeles and Orange Counties Building & Construction Trades Council, estimates that unemployment among construction workers in Southern California has plunged from as high as 25% during the depths of the recession to about 5% today.
“There has been a tremendous increase in the number of projects,” said Slawson of the high-profile projects--such as Staples Center in downtown Los Angeles--and the mundane shopping centers and housing tracts that have kept contractors and their employees humming.
Daniel Robles, a 42-year-old concrete mason, said he is now working five-day weeks instead of the three- or four-day stints that were more common a few years ago. As a result, Robles, who is currently working on a parking garage in Glendale, said he expects to make $5,000 more this year than last.
“It’s been a good year,” said Robles while eating lunch in his pickup truck at the job site.
The rise in construction activity has led many unions to expand their once-dormant apprenticeship programs in anticipation of future demand while some contractors are struggling to find enough workers to meet their schedules.
During a few days last summer, David Alexander, business manager for Reinforcing Ironworkers Local 416, could not find enough workers to fill up to 100 jobs--some paying as much as $22 an hour--because of the tight labor market.
“We can’t find the people and can’t keep them either,” said Alexander, whose union local has 3,000 members in Southern California.
As demand for workers has heated up, some contractors have begun poaching employees from each other by offering them unlimited use of a company vehicle and two-year contracts--unheard of in a business where most jobs last only a few weeks at a time.
Raymond Interiors Systems, a large contracting firm based in the City of Orange, has lost about 30 plasterers and drywallers to rivals in the last six months, said company Vice President Gary Paoli. The workers most in demand are experienced foremen, who have been lured away with wages at least $5 an hour above scale.
“They are bidding for them like fancy racehorses,” said Paoli, whose firm employs more than 250 workers in Southern California.
(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)
Building Momentum
The rebound in California’s construction industry employment has picked up recently as businesses have been expanding and new-home sales have risen dramatically. Average construction industry employment:
Los Angeles / Long Beach Metro Area: 1997: 110,000
Orange County Metro Area: 1997: 58,000
California: 1997: 554,300
