Post-storm construction hiring may aid US economy

Associated Press Modified: November 4, 2012 at 3:31 pm •  Published: November 4, 2012
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The need for rebuilding is widespread in the areas hit by the storm. Along New Jersey's 127-mile coastline, for example, Sandy wrecked thousands of homes, from multimillion-dollar houses to modest bungalows, along with boardwalks, roads and bridges.

"I have construction companies calling me — companies from North Carolina that have moved up here and want to partner up with us," said James Jefferson, co-owner of Property Services Integrated, a contractor in Jersey City. "We'll hire another manager, if not two managers, and another person in the office. We'll probably pick up a handful or six new carpenters."

Some contractors and construction firms could face a shortage of the skilled workers they need for rebuilding. Many lost jobs and left the industry after the housing meltdown all but froze demand for construction. Nearly 30 percent of the industry's jobs vanished.

Their loss has been a chronic drag on the economy. Typically, once recessions end, construction booms and fuels a new economic expansion. That didn't happen after the recession officially ended in June 2009, which helps explain why growth and hiring have remained subpar since.

Construction has begun to recover. Last month, U.S. home construction reached its fastest rate in more than four years — a seasonally adjusted annual rate of 872,000. That's more than 82 percent above the recession low.

Yet it's still well short of the 1.5 million annual rate considered healthy and the 2 million-plus homes that were begun at the peak of the housing boom in 2007. Just in New Jersey, construction employment since the boom has shrunk by a third, or 60,000 — 12,000 of them this year.

"It's going to be harder for construction firms to find these by-definition experienced workers," said Ken Simonson, chief economist for the Associated General Contractors of America. "Given that it's been six years of no net gain in (construction) employment, I think a lot of them would be hesitant to say 'I'll drop the job I've now found or give up on the training that I'm getting and go back to construction.'"

Some construction companies have struggled to find carpenters or wallboard installers, in addition to pipe-fitters and welders who have migrated to the oil and natural gas industries, Simonson said.

Still, most economists expect the sudden demand for construction jobs to draw more workers into the industry, at least temporarily.

"We will see not only construction workers in the northeastern part of the country, but workers from around the country will be flocking to the area," said Sung Won Sohn, an economics professor at the Martin Smith School of Business at California State University.

"I think it will be a significant boost to the construction industry."

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Veiga reported from Los Angeles, Perrone from Washington. AP Economics Writers Martin Crutsinger and Christopher S. Rugaber in Washington contributed to this report.