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Demand for skilled workers exceeds supply amid building boom

For a union leader like Charles Paladino, being very busy is a double-edged sword.

It’s great to have the work, as long as you have the workers.

And for the first time in decades, that may not be the case.

“In my 38 years, I’ve never seen it like this,” said Paladino, a senior member of Laborers Local 210, as he stood poised in an intersection on the Buffalo Niagara Medical Campus. He works for LPCiminelli, and is not related to developer Carl Paladino. “It’s unprecedented.”

There’s just one tiny problem: Who’s going to do all the construction work?

For the first time many can remember, there aren’t enough construction workers around Buffalo for everything that has to get done. From laborers, masons and painters, to electricians and plumbers, those with skills are in high demand and without a lot of backup, as they shuttle from one job to the next. And it may get worse next year.

It’s not just a local problem. More than four of every five member companies in the national trade group Associated Builders & Contractors say they are now facing a shortage of skilled labor. Across New York, the construction industry gained 21,500 jobs from October 2014 to October 2015, including 7,800 just since September.

Adding to the urgency, about 40 percent of the construction workers across the state will be of retirement age within two years. And the U.S. Bureau of Labor Statistics predicts that the industry will need another 1.6 million new construction workers by 2022.

“There is a shortage in some markets, and it is slowing (projects),” said Stockton Williams, executive director of the Urban Land Institute’s Terwilliger Center for Housing. “Do they get done? Of course. But they may cost a little bit more. They may take a little longer. That ripples through the system.”

Empty union halls

Finding local construction workers has become a little tricky.

“It’s been a very challenging environment over the past several months to find quality labor that was ready, willing and able to go,” said Eric Recoon, vice president at Benderson Development Co.

For example, at one point this fall:

• 88 percent of the 1,700 active members of Carpenters Local 276 were employed.

• 90 percent of the 600 journeymen members of the Laborers Local 210 were working.

• 90 percent of the 125 active members of the Cement Masons Local 111 were employed.

• All of the 1,000 active members of the Plumbers & Steamfitters were employed, forcing the local to bring in help from elsewhere.

• All 325 members of the Sheet Metal Workers Local 71 are on the job.

• All 300 construction-related members of the Teamsters Local 449 are working.

“We were pretty busy all the way up until the beginning of November,” said John Tomasello, business agent for Cement Masons Local 111 in North Tonawanda, whose closest “sister” local is in Pittsburgh. “In the middle of summer when things were really starting to boom, we had a little bit of a shortfall.”

That’s great for the current workers, who have guaranteed employment. Some unions are even notifying retirees of opportunities.

Go-go days

Welcome to the new Buffalo, where the slow days of old have been replaced by the go-go era of rampant development and continuous employment. Among the large scale projects are: the University at Buffalo’s new Jacobs School of Medicine and Biomedical Sciences, the John R. Oishei Children’s Hospital, Roswell Park Cancer Institute’s Clinical Sciences Center, SolarCity’s 1 million-square-foot production plant at Riverbend, and Delaware North’s 12-story headquarters and hotel on Delaware Avenue.

“It’ll take three years for contractors to be out of work at this rate,” said Buffalo entrepreneur and developer Mark Croce, who owns Statler City and is converting a downtown building into the boutique Curtiss Hotel.

The building industry is at peak employment right now in the Buffalo Niagara area. According to the state Labor Department, there were 27,000 workers in the construction, mining and natural resources sector in October. That’s the highest tally recorded for any month in the region going back to at least January 1990.

It’s up by 4,400 from a year ago, or 19.5 percent, and by 1,300 from September, or 5.1 percent. And it follows previous records set throughout the summer.

“This has been the best summer for construction that we’ve seen in the modern era,” said John Slenker, the Labor Department’s regional economist.

While some of the biggest projects will eventually come to an end, there’s no sign that the overall pace of redevelopment will slow down anytime soon.

“We’re victims of our own success,” said Tom Fox, director of development for Ellicott Development Co. “It’s hard to find contractors, but that’s a good thing for the economy.”

No crisis, yet

So far, officials say, there’s no crisis locally, especially as the colder weather is setting in. “I’m not hearing that folks are panicking or that it has reached catastrophic levels yet,” said David Chiazza, executive vice president for Iskalo Development Corp.

There are reasons for that. Developers and large contractors typically have at least two or three preferred subcontractors or vendors that they can turn to from each trade, as well as a stable of workers they rely on, both in their own employee ranks and from the unions. They also plan far in advance and stagger the work, so that contractors have plenty of advance notice. And other large contractors or even startup firms are entering the market.

“We have a pretty deep bench of go-to companies,” said David Pawlik, owner of developer CSS Construction. “We’ve really not felt a pinch yet.”

Also, the problem isn’t yet universal across all unions. Laborers Local 210, for example, maintains a list of “out-of-work” members who it can tap, and only had one instance this year in which it had to tell a contractor that it couldn’t fill a need, said Brian Reff, the local’s president and business agent.

Similarly, at the Bricklayers and Allied Craftworkers Union Local 3, which stretches from Buffalo and Jamestown east to Rochester and Corning, officials are still seeking more work for their apprentices, said Richard Williamson, vice president of the Pittsford-based chapter. He would not divulge specific numbers of workers now on jobs.

And Carpenters Local 276 already includes Rochester and part of the Southern Tier within its membership, giving it a bigger pool to draw from. “The majority of our local guys are working,” said Daryl Bodewes, financial secretary for Local 276. “Rochester’s a little slow this year, so we’re pulling a lot of our guys from the Rochester area to the Buffalo area.”

Rush to train

Many contractors and unions are facing pressure to quickly train new workers or import them from elsewhere. “We’ve increased our apprenticeship numbers and we’ve been able to man everything we’ve had up to this point,” said Paul Crist, business agent for Sheet Metal Workers Local 71 in Buffalo, which has brought in 15 to 20 additional workers from Rochester, the Southern Tier and even Albany.

Also, companies are seeking new venues in which to recruit and teach employees. “Anywhere we can, we’ll go out and we’ll try to educate or get people,” said George Harrigan, principal officer for Teamsters Local 449 in Buffalo. “People need to know the opportunities that are there.”

Local 449’s members include Class A licensed delivery truck drivers, such as for cement trucks. “There’s such a demand for them, it’s unbelievable,” Harrigan said.

In some cases, work crews are being led by new employees taking their first cracks at being foremen or supervisors, said Steven A. Perrigo, senior project manager at Turner Construction Co., which is using 10-hour days at the Children’s Hospital project because it has faced some challenge finding ironworkers and staying on schedule.

Perrigo said he fears it will reach “a pinch point” late next spring for mechanical, electrical, plumbing, fire protection and finishing workers.

Bodewes, of the carpenters union, also noted that work on interior systems hasn’t begun in earnest yet for three major projects. “Next year will be busier for us than this year,” he said.

So unions are turning to affiliates for help, bringing in more labor from the Southern Tier, Rochester or even Syracuse and Albany. “It’s more of a regional issue now, and even reaches out and becomes a state issue,” said Michael McNally, business manager for the United Association of Plumbers & Steamfitters Local 22 in Orchard Park, whose 1,000 active members are all working, forcing the local to bring in 160 workers from other chapters.

Even more, there are now construction workers at Riverbend and other project sites here from as far away as California – normally bustling parts of the country where there’s usually no shortage of work.

“I’ve never seen them come from New York City to work here and as far away as Arizona and Las Vegas,” said Paladino, the union leader. “There’s more demand than there is supply.”

Industry problems

The aging of the building trades workforce is happening at a time when few young people are following in their footsteps.

And the depth of the recent Great Recession drove many small and midsized construction firms out of business, while those that survived struggled to get the financing they needed.

Additionally, more than 2 million workers were laid off during the downturn, according to the Associated General Contractors of America, another industry trade group. Many of them were also immigrants, who then returned to their home countries.

“This is basically a perfect storm that has taken place in the real estate industry nationally,” said Kenneth Franasiak, CEO of Wheatfield-based Calamar Enterprises.

“A lot of those people went out to find other employment, and they’re not coming back into the trades,” Franasiak said, adding that current immigration policies need to be changed to bring in more labor.

According to a survey of 1,000 construction firms by AGC a year ago, 83 percent reported having a hard time finding carpenters, equipment operators, laborers and other craft workers, while 61 percent were struggling to fill professional posts such as project supervisors, estimators and engineers.

Viable jobs

Developers, contractors and labor leaders are trying to change the image of the industry for young people, and to showcase higher salaries, benefits and opportunities that come with it.

“We need to show them that these careers are real and viable, and they just need to have the will to go in them,” said Brian Sampson, president of the Empire State Chapter of Associated Builders and Contractors, and former head of Unshackle Upstate. “It’s just changing the stigma of this industry.”

Unions like the Teamsters, Plumbers and Bricklayers are expanding their own apprentice programs and creating separate regional job training programs to recruit and develop more workers. “The market will eventually meet this need. These are good jobs, and they’ll eventually be filled,” ULI’s Williams said.