Iowa’s construction work is rebounding, but companies are struggling to find enough skilled laborers to meet the growing demand

More construction workers in demand as projects on the rise: Construction projects are on the rise, and building companies are trying to woo back their former workers, and reach out to area colleges to recruit new help.

Written by
Donnelle Eller
May 30, 2013   |

$9 billion: This year, Iowa is expected to see about $9 billion in large public and private commercial projects and a rebounding housing market.
12,000: Iowa has 12,000 fewer construction jobs now than it did in 2006.
10%: U.S. construction spending increased an average of 10 percent annually for the past two years.
18%: Iowa pay for builders has improved, according to the U.S. Bureau of Labor Statistics, climbing 18 percent since 2007.

During the recession, Jack DeLeon Jr. looked at moving to North Dakota to build homes for some of the thousands of oil workers flocking to the Williston Basin for jobs.

But the shortage of homes included space for the builders constructing them. “At the end of the day, you still have to have some place to park your body,” said the Des Moines home­builder.

DeLeon decided to remain in Iowa and tough out one of the worst building recessions in history. But many builders moved on — going into manufacturing, moving to other states like North Dakota, and retraining for jobs in new industries. Now, builders say they’re beginning to see shortages that they say will likely only grow as big projects ramp up.

“A lot of workers have been out of the construction business for seven years now. And it’s quite likely that most of them have moved on,” said Ken Simonson, an economist with the Associated General Contractors of America, an industry group based in Arlington, Va. “They’ve either been hired in other industries, they’ve gone back to school, or they’ve retired and dropped out of the labor force,” he said.

At the same time, fewer young workers are entering the field, baby boomers are retiring, and demand is growing.

This year, Iowa is expected to see about $9 billion in large public and private commercial projects and a rebounding housing market. Major projects include $2.5 billion in work at state universities, a $238 million renovation at Principal Financial Group’s downtown Des Moines campus, a $100 million expansion of Wells Fargo’s West Des Moines campus, and the first $300 million phase of Facebook’s nearly $1 billion data center in Altoona.

Work also begins this year on two huge fertilizer projects: Orascom Construction Industries is building a $1.8 billion plant near Wever in southeast Iowa and CF Industries plans a $1.7 billion expansion near Sioux City.

“There’s a lot of work out there and a tremendous amount of work coming,” said Kent Brcka, vice president of operations at Henkel Construction Co. in Mason City.

Already, builders are reporting shortages for some skilled workers — steel workers, heavy equipment operators, concrete workers, carpenters and project supervisors — and they say it’s likely to broaden and deepen in the months ahead. “It’s hard to find skilled workers who want to do construction today,” said Mike Espeset, president of Story Construction in Ames. “It’s harder than it was, and I think it’s going to get a lot, lot worse.”

Henkel’s Brcka said northern Iowa has lost workers to hydraulic fracturing operations in the oil fields in North Dakota. “Heavy equipment operators are hard to find because those with experience headed north,” he said.

Master Builders of Iowa estimates the industry will see a shortage of about 2,730 workers annually over the next seven years, based on demand, retirements and the number of new trained workers coming into the industry. That approaches 20,000 workers by 2020.

The builders group is pushing efforts to recruit young workers, with job fairs at high schools and community colleges, Iowa leaders said.

States like Alabama, Georgia and Arizona also are mounting major worker recruitment efforts to attract young workers, said Brian Turmail, the spokesman for the Associated General Contractors of America. For example, Alabama hired “Dirty Jobs” TV star Mike Rowe to promote the industry to young workers.

Iowa unions also are rebuilding apprenticeship programs and urging former members to return to the industry.

Earl Agan, business manager for plasters and cement masons Local 21, said he’s sent letters to about 80 former members, encouraging their return. Agan realizes it could be a tough sell, especially if workers found jobs that lack the seasonality of construction.

“Some workers will be willing to come back once we’ve got steady work, but some are just gone forever,” said Agan, who also is president of the Central Iowa Building Construction Trades Council, a group of union leaders and contractors focused on worker training.

Iowa has 12,000 fewer construction jobs now than it did in 2006, when construction activity began to decline, and the national jobs deficit is close to 2 million.

U.S. construction workers will need to see long-term sustained improvement before returning, Turmail said. Iowa, Arizona, Texas and Colorado may be seeing some construction shortages, but in many parts of the country, construction workers continue to struggle to find work.

“Why would you go back to the girlfriend who dumped you, if the new one has been pretty loyal?” he said.

Still, some large builders across Iowa are asking some critical workers to delay retiring, using recruitment companies to find workers, and gearing up in-house training.

Mike Tousley, executive vice president at Weitz Construction, said the company has encouraged some experienced project managers to postpone retirement. “We’re having a lot more conversations than we have in the past, but so far we haven’t been too successful in convincing anyone” to continue working, Tous­ley said.

The large Des Moines-based contractor has been hiring both professional and skilled workers since the beginning of the year. The company’s industrial group “is in a hiring frenzy” with construction on Orascom’s Iowa Fertilizer Co. plant construction beginning, Tousley said. Orascom purchased the longtime Iowa company earlier this year and Weitz is a project leader.

“There are lots of applicants, but with the skills set we’re looking for, and the experience we need, it’s been a real challenge, a real struggle,” Tousley said, adding that some of the hardest jobs to fill are project engineers, managers and estimators. The company’s hourly, skilled labor pool is “about as low as it’s been in a long time. But it’s about to mushroom.

“In the past three or four years, we’ve been able to get by. There has been work, but there haven’t been really large projects” like those coming online now, he said.

U.S. construction spending increased an average of 10 percent annually for the past two years, but employment has climbed only an average of 2 percent annually, the Associated General Contractors of America said. “More firms are at the point where they can no longer say we can make do by stretching the hours of workers we have,” said Simonson, the industry economist. “There will be more ‘help wanted’ signs out there.”

Tousley said Weitz hasn’t begun offering hiring bonuses but has used them in the past. “I could see us doing it again in the future,” he said.

Iowa pay for builders has improved, according to U.S. Bureau of Labor Statistics, climbing 18 percent since 2007. By comparison, manufacturing pay has climbed 11 percent during that time.

Henkel’s Brcka said companies like his will need to rely on subcontractors more frequently to get jobs done — and pay more overtime to the workers he has.

As work on big projects overlaps, that will make managing their completion more difficult, and potentially more costly. “It’s pretty risky just to assume that you’ll find the people that you need,” he said, adding that Henkel has added a training position to help better prepare workers for existing jobs and positions that senior workers will vacate through retirement.

The north Iowa company could add about 10 qualified workers to its current 100-person workforce, he said.

Ned Rasmussen, who leads the Des Moines Area Community College’s building trades program, said he gets three or four calls a day from contractors looking for workers. And he has 45 students interested in his courses but only has room for 25.

“I think the general public sees that there are construction jobs out there,” said Rasmussen, adding that construction enrollment was steady despite the recession. “I think they wanted to retrain for something they thought they’d really enjoy. Now, it’s paying off for them.”

Creighton Cox, executive vice president of the Home Builders Association of Greater Des Moines, said some home builders and their subcontractors are busier than they’ve been in years. “Those who want to hire can’t because the workforce isn’t there,” Cox said. “Others aren’t hiring because they’re still unsure the recovery will last.”

DeLeon, the Des Moines builder, said his business is still struggling. A run-up in large construction projects could reduce the number of competitors he sees for smaller residential and commercial jobs. “I’m doing everything I can to keep our 67-year-old business alive,” said DeLeon, who runs Jack DeLeon Construction with his 83-year-old father, Jack Sr.


Lee County Still Has the Highest Unemployment in the State

Fort Madison Daily Democrat
County Still Leads in Unemployment

While the unemployment rate continues to ease in Lee County, the state of Iowa and the nation, Lee County still holds the dubious distinction of having the highest unemployment rate in the state.

According to Iowa Workforce Development, Iowa’s unemployment rate overall for March, which is the most recent numbers available, was 4.9 percent. Lee County at that time, however sat at 7.7 percent.

Those numbers have continued to trend downward in the past year. Last March Iowa’s unemployment rate was 5.3 percent and Lee County’s was 8.3 percent.

Only four counties in Iowa saw an increase in unemployment rate, including the county with the second highest rate of 7.2 percent in Jones County, which is the county directly east of Linn County.

The other counties seeing increases were Bremer, Audobon and Decatur counties.

Several counties had some amazing gains in jobs.

Jasper County, for example, briefly took the title of highest unemployment rate from Lee County last year when it had a 9 percent unemployment rate compared to Lee County’s 8.3.

Jasper County now sits at 6.6 percent unemployment. That is still higher than the state average but moving quickly in the right direction.

Education and health services added 800 jobs in March, leading all sectors in growth. According to IWD, the gain was fueled by hiring in the health care industry with the addition of 900 jobs and more than offset last month’s drop in health services, the first since June 2011.

Manufacturing added 500 jobs with this month’s gain concentrated in nondurable goods factories.

Manufacturing has started 2013 on a positive note, increasing by 3,700 jobs this year. Finance posted the only other gain for March adding 300 jobs and currently is 1,700 jobs higher than the same month one year ago.

On the other hand, leisure and hospitality reported the largest loss in March, down 2,000 jobs. Hiring was slower than expected in arts and entertainment, although accommodations and food services also shed 800 jobs. Construction followed with a loss of 1,300 jobs; although construction in Lee County should be up with workers at the fertilizer plant starting to arrive.

Professional and business services declined by 1,100.

There was a decrease in nonfarm employment of 5,500 in March, which was the first time since December the state has seen a decrease in that area, but nonfarm unemployment is still up 11,000 from this time last year.

IWD reports the decrease is due to weak hiring in seasonal industries like construction, professional and business services and leisure and hospitality.

Even with that hiring slowdown in the nonfarm sectors, numbers have continued to trend upward in the last year with manufacturing leading all sectors with annual job gains of 7,000 jobs or 3.3 percent.

Education and health services are up 2,000 jobs and financial activities is up 1,700.

Information saw the largest job loss from a year ago, losing 1,400 and construction lost 800 jobs from last year.

Federal Grant to Help Southeastern Community College Teach Skills for Manufacturing Jobs

Federal grant hopes to strengthen manufacturing industry in Iowa

Posted: Apr 30, 2013 4:16 PM CDT

By Andy Devine, Multimedia Journalist

Lee County continues to struggle with the highest unemployment rate in Iowa, but officials at Southeastern Community College hope new federal funding will help change that.

The initiative is geared towards boosting the manufacturing industry, and training students for blue collar jobs.

Officials at SCC say they received $600,000 to add new courses, that would give students advanced skills in the in-demand manufacturing industry.

(See “SCC expands Keokuk campus to help unemployed people find jobs”)

Stephen Hickey is a SCC students who says trades work is the kind of work he’s always been good at.

“I was a welder when I was a kid, so factory work. Hands-on stuff,” said Hickey.

Students like Hickey can take the skills they’ve learned in this course and get a job in the manufacturing industry upon completion.

But now thanks to the I-AM federal grant, Hickey has the opportunity to learn more advanced skills to move up in his field.

I-AM grant director Susan Dunek says there’s a need for higher skilled workers in the field.

“It is well documented that we have a mid skill gap here in the state of Iowa and there is a need for workers who are in that mid skill range,” said Dunek.

And with the new funding Dunek says the college hopes to strengthen it’s workforce.

“Skilled jobs are ones that require some type of additional qualifications above and beyond just being able to perform work,” said Dunek.

Dunek says students will have the opportunity to receive certificates in such fields as production, logistics and transportation.

Hickey says he thinks the new courses will benefit people like him who are pursuing a career in manufacturing.

The courses are short-term certificate programs, and are not necessarily part of degree programs.

For more information on classes and start dates, call Southeastern Community College.