Despite challenges thrown at it with the pandemic, job shutdowns and now higher lumber prices, the Spokane metro area increased the number of construction jobs this past year while 236 metro areas across the nation saw construction employment decline.
Based on analysis done by Associated General Contractors of America, which represents commercial builders, the number of construction jobs dropped across the nation from February 2020 to February 2021. Much of those job losses were blamed on project cancellations, increasing material prices and supply-chain problems.
“Relatively few places have recovered from the pandemic-induced impacts on the construction industry,” Ken Simonson, the AGC’s chief economist, said in a recent news release. “Project cancellations, spiking materials prices and significant supply chain challenges are making it hard for most firms to add new construction jobs compared to a year ago.”
The Woodlands, Sugar Land, Texas metro area was among several in Texas that lost thousands of jobs. It lost 37,600 construction jobs. New York City dropped 26,700 jobs. They were among the 236 metro areas that lost construction jobs.
Spokane was among the 83 metro areas that added jobs. The Seattle area added 2,800 jobs and Boise added 2,700 construction jobs, according to the AGC analysis.
The Spokane metro area added 200 jobs, or a 1% construction-job increase during that time frame, said Cheryl Stewart, executive director of the local chapter of Associated General Contractors.
“I would say that without COVID, we would have had more growth,” Stewart said.
While lumber prices have skyrocketed, Stewart said COVID-19-related forced shutdowns and changing sub-contractor schedules have created more havoc.
“If you have a sub-contractor out, that throws off your entire schedule,” she said. “Those slowdowns hurt employment. But, I don’t know that I can make the argument that it’s because of prices yet.”
Joel White, executive director of Spokane Home Builders Association, agreed. He said contractors were having problems finding enough skilled workers prior to the pandemic and those problems persist as the economy tries to claw itself out of the pandemic.
“Talking to our members, there’s a serious lack of hirable individuals,” White said. “Our subcontractors are not able to find workers. It’s gotten worse with the pandemic.”
He noted that Spokane County approved about 1,500 permits last year for single-family homes. During the peak-building period in 2005 just prior to the Great Recession, Spokane County had about 2,600 building permits for residential homes, he said.
“And so, that’s what we could have been doing if we had enough laborers,” White said. “We probably could have done another 1,000 homes.”
Those extra homes could have brought some relief to the white-hot local real estate market, which has a severe lack of available homes resulting in higher housing prices.
White noted that homebuilders are competing for the same workers along with commercial builders. He said his organization will be sponsoring an event in May at Mead High School to try to attract more students into skilled trades.
“Traditionally, it’s been who you knew. The boss would ask, ‘Who do you know who would like to come to work?’ ” he said. “The whole industry is now reaching out to high schools and veterans in a targeted effort to engage potential workers.”
Stewart, whose organization represents all builders except those who build homes, said the lack of available help has kept local commercial building somewhat stagnant.
“To be perfectly honest, it was sometimes more profitable to sit at home and not work,” she said, referring to state and federal unemployment assistance during the pandemic.
Add to that the spiking costs of materials, and Spokane residents could see a wide range of effects soon, she said.
“I know our national economist is not looking at any relief on that side of it in the near future,” Stewart said of material prices. “We are going to see owners not build projects they otherwise would have because of increased costs.”
Those higher costs will be passed on to businesses or private individuals who are seeking to start new projects.
“On the public side, it could mean fewer projects,” she said. “If government has a certain amount of money to spend on road construction, there could be projects lost. With the price increases and supply-chain issues, you will see delays in projects.”
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