There's a surplus of construction workers both here and nationally, and with the pipeline of expected projects in the coming months flowing at just a trickle here, industry observers expect continued low employment ahead for this area's trades workers.
"I've been in the roofing trade since 1977, and I haven't seen it as bad as it is now since the early 1980s1980 to 1982," says Scott Rash, of the Spokane-based Roofers Local 189. "It's just not this trade; it's all trades."
Says Kate McCaslin, president and CEO of the Inland Pacific Chapter of Associated Builders & Contractors, "The reality is, today, like everywhere else, that employment is down."
Doug Tweedy, regional labor economist here for the Washington state Employment Security Department, says the average number of construction jobs in Spokane County for the first six months of this year fell by 1,200, to 12,700, compared with the same period in 2008.
"We're seeing a lot of construction laborers applying for unemployment benefits," Tweedy says.
The situation is in stark contrast to times here when construction activity was booming and contractors were scrambling to find enough skilled trades workers, such as in 1990, when some in the industry were complaining that not enough was being done to attract new employees to the industry. Some said back then that projects were not meeting planned timetables due to a lack of workers.
That's not the case today.
Rash says that compared with the 2008 construction season and earlier, job opportunities for roofers today are poor, although he says work appears now to be picking up slowly.
Nonunion roofers are staying employed more than their counterparts in the union sector of the trade, he says. Local 189 represents roofers in Eastern Washington, North Idaho, eastern Oregon, and western Montana. It represents members who work for six contractors, and usually between 120 and 140 workers, says Rash.
Tweedy says there's a notable surplus of construction workers in three categories: laborers, carpenters, and welders.
In June, 312 construction laborers were collecting unemployment insurance, along with 310 carpenters, and 260 welders, he says, adding that those are high numbers, particularly for the summer season.
"This should be the low-claim period for those occupations," Tweedy says.
Other trades appear to be faring better.
"Plumbers and electricians haven't been as hard hit as the other three," Tweedy says. A total of 137 electricians were collecting unemployment insurance in June, along with only 43 plumbers, fewer than some of the other trades, but still more than last year.
In June 2008, 110 construction laborers were collecting unemployment insurance, along with 132 carpenters, 50 welders, 91 electricians, and 32 plumbers, Tweedy says.
Fortunately, he says, a drop in construction costs and the addition of federal stimulus funding likely will spur more construction and get additional trades people back to work.
Wayne Brokaw, executive director of Associated General Contractors of America-Inland Northwest (AGC), says commercial construction here is down about 90 percent from a year ago.
"It's not very healthy right now," Brokaw says. "It's looking better for the end of July than it looked at the end of June. Still, that's not even reaching the point of looking fair compared to last year."
Building permits for the city of Spokane for the first seven months of 2009 totaled $127 million, down from $178 million for the year-earlier period, city records show.
"It's off considerably from where we were last year," Brokaw says. "You can't put a spin on it. You just can't."
He adds, "We need developers and we need banks to get away from the 'herd mentality.'"
He says that with construction materials prices down today, compared with last year, "Now is the time to go build. The price isn't going to go any lower."
"Banks and developers need to say now is the time to be adventurous, and have confidence, because the price is right," Brokaw says. "Everyone is getting more bang for their buck," if they decide to go forward with construction.
Brokaw says he doesn't see any signs of construction activity improving anytime soon. He says elected representatives need to work harder to get federal stimulus funding to finish constructing the massive North Spokane Corridor project, which would put more people to work. The Washington state Department of Transportation says on its Web site that the project has $40 million in "shovel-ready" work awaiting funding, and at least $1.6 billion in work overall left to do.
"Let's get this project done in the next 10 years," Brokaw says. "Those are jobs that move the economy locally."
Construction employment declined in all but 19 metropolitan areas nationwide in June compared with a year earlier, a recent analysis released by the national AGC shows. The analysis, which ranks the 12-month construction employment change reported by the U.S. Bureau of Labor Statistics for 352 metro areas, shows that few places have been spared the widespread downturn in construction employment over the past year.
So while the other sectors of the economy have been hit hard, construction employment has been "devastated," AGC says.
McCaslin, of Associated Builders & Contractors (ABC), says contractors here have less work in their pipelines, or backlogs, than they did in November 2008, when ABC began collecting such data. The construction backlog is the amount of work that companies are contracted to complete in the future. Lower backlog values indicate fewer projects are under contract, leading to more uncertainty about the future for contractors.
ABC represents nonunion concerns that do commercial and industrial construction. The chapter here serves contractors in Eastern Washington and Idaho.
The Spokane area is doing better than other parts of the country, including Michigan, California, and Nevada, but not as well as others, such as Texas, Wyoming, and North Dakota, McCaslin says.
Contractors willing to travel for work likely will improve their chances of weathering the recession, McCaslin says. And contractors have been making every effort to reduce overhead costs.
Contractors that in the past were unwilling to do government work because of the bureaucracy are now doing it, "because that's what's out there," McCaslin says.
That likely will be the case until the credit markets improve, she says. "It's pretty clear the credit markets remain closed."
Construction projects for manufacturers looking to retool and in the energy industry have been a bright spot for contractors, McCaslin says.
She says new contractors who opened their doors during boom times are struggling in the current economy, "because they haven't had to deal with it before." Contractors with more experience, who have experienced lean years before, are better equipped to manage the downturn, she says.