Has the Las Vegas construction industry recovered from the recession?
According to the Nevada Department of Employment, Training and Rehabilitation, the annual average construction employment numbers for Clark County in 2008 were 92,320. By 2012, it plummeted to 37,208. In 2014, the most recent published count showed 45,260 employed in construction.
Las Vegas wasn’t alone in the crisis. The U.S. Census Bureau reports in an October 2015 analysis that more than 60 percent of construction workers displaced by the housing bust either left the market by 2013 or found employment in other industries. But updated 2015 year-end reports for Southern Nevada from the Las Vegas Global Economic Alliance (LVGEA) showed a promising economic upswing:
Total number of businesses attracted or expanded: 34
Total number of jobs attracted or expanded: 3,347
Total economic impact as a result of the attracted or expanded companies: $934 million
Much of the expansion of existing companies is in Las Vegas’ core industry: gaming and tourism. Casinos and hotels are now making long-delayed capital building investments. Construction of new additions and remodeling of aging properties is revitalizing the recession-devastated industry.
With Southern Nevada’s new economic diversification system paying off in a big way, will Las Vegas have enough workers to keep up with growing demands?
“The line between economic development and workforce development is increasingly blurred,” said Jonas Peterson, president and CEO of LVGEA. “The availability of a talented workforce is the single most important factor in recruiting a company to our market.”
Frank Hawk, business manager of Carpenters Local 897, remembers “when the Echelon (hotel-casino) closed down in April 2008 — 650 (members) signed out of work in three hours.”
“We knew the party was over,” he said. “The rest of the world might have been in a recession, but construction (here) was in a depression — it hit bottom.”
PARTNERSHIPS HELP GROW NEW ECONOMY
“We’ve just opened a new training center just west of the Strip because we knew this day was coming, and we’re going to have to start training those young people for those jobs that the baby boomers are leaving,” Hawk said. “We’ve made alliances with the contractor’s association to put together game plans for the shortages.”
Last year, the union initiated a construction foreman training program aimed at shoring up the management ranks of trade. The number of enrollees had grown to 123 as of Jan. 7.
“The only thing we talk about in there is how to make ourselves more productive, more efficient,” said Hawk, “because we’ve got to increase our contractors’ profitability so they can lower their pricing so we get more work.”
BETTING ON THE CONSTRUCTION INDUSTRY — AGAIN
Former Minnesota resident Chris Rowe, 44, experienced the rise and fall of the Las Vegas construction business firsthand. He started his career as a union carpenter and worked his way up the ranks, gaining experience as a journeyman and foreman. In 2002, he left his native Minnesota for Las Vegas. By 2005, he had established his own small construction company, and by 2012, he had closed it and moved back to Minnesota.
“I stayed in touch with Las Vegas through friends,” he said, “and people here that said, ‘We’re coming out of it; we can feel it. We’re not out of the clouds yet, but we’re going the right way. It’s time to come back.’ ”
Rowe returned last April and is now managing director of construction operations of the west division of Shaw-Lundquist Associates, a certified minority business enterprise and one of the largest Asian-owned construction firms in the nation.
Some of the projects he is working on now were ones shelved during the recession. He said his No. 1 challenge is trying to find available experienced project managers and skilled craftsmen.
His dilemma seems to be reinforced by authors of the October 2015 U.S. Census report, Hubert Janicki and Erika McEntarfer. They postulate that contributing to a shortage of experienced workers is a shift in hiring preferences — during the downturn, construction firms hired fewer young workers, so fewer young workers gained experience in the industry, and the share of older workers grew faster than in other industries.
THE RECRUITMENT OF YOUNG PEOPLE
“We need to convince young people that skilled construction trades are a valid career choice,” said John Restrepo, principal of Las Vegas-based RCG Economics LLC. “Construction is one of those few skilled professions that can’t be outsourced to another country. By the very definition of the nature (of construction), it remains in the United States.”
He recommends reaching out to high school students by:
- Increasing vocational technical training in schools.
- Maximizing money received from the U.S. Department of Labor for workforce training for not only entry-level positions but also incumbent training.
- Ensuring better communication between the community college and the local business community.
Hawk agreed that it is harder to recruit the millennial generation.
“The millennials think differently, and to go in and try to sell them on a part-time job that you’re probably going to bleed (in) everyday — it doesn’t look attractive,” he said. “It takes a special person who wants to do it. I think that pride gets instilled once they start.”