Building jobs stay scarce in Las Vegas

Journeyman carpenter Tim Powell hasn't had steady work in Las Vegas for three years now, but doesn't even think about moving back to California. He knows it's worse there.

Powell is one of about 72,800 construction workers whose jobs have disappeared since 2006 -- roughly two-thirds of the Las Vegas construction work force, from laborers to superintendents, crossing all trades.

"As far as work goes, it's dog-eat-dog," Powell said Tuesday at the Carpenters Union training hall on Bonanza Road. "My hopes are low, but I'm a persistent person. You keep on beating the bushes, you'll find something. It may not be what you want, but it's something."

While most Southern Nevada economic indicators show improvement, there's no turnaround reflected in the beleaguered construction industry. Total employment grew statewide in March for the first time in 38 months, yet construction-related employment fell 8.4 percent, and employment in specialty trade subsectors fell 17.1 percent, the Associated General Contractors of Las Vegas reported.

A first-quarter market briefing prepared by Las Vegas-based Applied Analysis showed construction employment at 41,200 in March, compared with 45,000 the same month last year.

It slipped a little further to 39,200 in April, a shadow of the 112,000 jobs at the peak of the boom in June 2006, when construction workers accounted for 12.1 percent of total employment, according to Applied Analysis. They're now 4.9 percent of the total.

Laid off from his job at McCarran International Airport a couple of months ago, apprentice Pat Hutchins, 19, is excited to have landed a remodel job at Caesars Palace starting Monday. With just eight months of experience, he's picking up additional skills at the training hall.

"It's pretty tough. I'm a low-end apprentice, pretty cheap to pay," said Hutchins, who commutes to Las Vegas from Bullhead City, Ariz. "Things will turnaround. That's what everyone says. Jobs are going on, but they're small jobs -- six months, not a year long."

Steve Holloway, executive vice president of AGC Las Vegas, said it feels as if the market has hit bottom and there's talk about new projects, but financing remains tight.

"The biggest challenge is on the commercial-industrial side," Holloway said Tuesday. "We're simply overbuilt. Look at the vacancy rate (17.9 percent). We're still at least three years from recovery."

Among the bright spots in the quarterly report are strong in-migration from California, a decline in unemployment insurance claims and an uptick in the tourism industry.

The tourism sector showed 2.4 percent employment growth, or 7,500 jobs, in the past 12 months, spurred by an increase in visitor volume, spending and hotel room rates.

Commercial building permits rose significantly, more than double from a year ago, when permitting essentially stopped. The trailing 12-month series showed 251 commercial permits, a 3.7 percent increase from the prior period.

Much of the new-permit activity was for remodeling and tenant improvement, but those jobs are falling off, too, Holloway said after meeting with city and county building officials Tuesday morning.

"I talk to people in the gaming industry and none of them have any big plans except the big Ferris wheel, if it gets financing," Holloway said.

The 500-foot Skyvue Las Vegas Super Wheel is planned as part of a $100 million Strip development across from Mandalay Bay.

Along with sluggish demand for new construction, contractors are being squeezed by higher costs for building materials, an analysis of producer price index figures released Tuesday by Associated General Contractors of America shows.

That threatens to drive more construction employees and companies out of work unless public officials lower barriers to public and private investment, AGC chief economist Ken Simonson said.

"New cost pressures bubbled up in May, even as prices moderated for a few items," he said. "Meanwhile, contractors have largely held the line on their bids in order to win work while demand for construction remains tepid at best."

Wallboard and other gypsum products rose 4.3 percent in May; asphalt paving mixtures and blocks, 3.2 percent; aluminum mill shapes, 2.6 percent; construction plastics such as pipe and insulation, 1.8 percent; and steel mill products, 1.1 percent.

Southern Nevada's construction cost index fell 1 percent from a year ago. The average price for an acre of land rose 13.1 percent to $206,275; the average construction worker wage fell 0.5 percent to $22.29 an hour; and taxable construction spending slid 1.2 percent to $135.9 million.

Wage and salaries are expected to continue to decline. Building material prices are not.

There's been a lull in demand for raw materials such as copper and steel in recent months, but China and other developing nations are expected to demand an ever-growing share of natural resources, the AGC report said. That will keep construction costs high.

A couple of bills came out of the Nevada Legislature that could help the construction industry, Holloway said. One removed the sunset clause for the quarter-cent sales tax, which will enable the Southern Nevada Water Authority to complete the "third straw" intake at Lake Mead. That will create an estimated 3,100 construction jobs, he said.

Another bill authorizes a Boulder City highway bypass if a private partner "steps up to the plate," Holloway said.

"I think they'll probably get one because that's an ideal place for a toll road," he said.

Perhaps the biggest disappointment of the legislative session was the failure to enact meaningful construction defect litigation reform, he said.

While Southern Nevada's economy is improving overall, risk remains acute in the construction sector where supply-demand imbalance persists and the number of displaced workers remains near peak levels, the AGC report said.

Powell said he's polishing his skills at the training center. He took a cabinetry class last year and now is learning how to install crown molding.

"I don't want to hang drywall. That's a young man's game, plus it's a dirty job," he said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.