2008 Construction Conditions Survey

September 24 2008

By Robert Gasperow

The industrial construction market is currently in an expansion period. This is fostering a growing situation of additional work practices which increase labor costs beyond the contractual wage and fringe rate. As a result, traditional measures of labor costs and labor cost escalation are excluding a sometimes significant component of current labor costs. Documentation of this situation remains minimal.

To obtain a cleaner picture of the current marketplace, The Association of Union Constructors (TAUC) and the North American Contractors Association (NACA) requested the Construction Labor Research Council (CLRC) to gather information to identify the extent of cost increasing labor practices in the current market. CLRC has undertaken a survey of industrial contractors to obtain information on the extent of labor practices on their projects.

Survey responses follow.

The survey’s objectives were:

• To quantify the extent that labor shortages exist.
  
• To assess the prevalence of measures being taken to deal with this situation.
  
• To measure the cost impact of these measures.

The survey examined modifications to work schedules and supplemental payments which are being made.

Responding contractors indicated that:

• Close to half are utilizing an extended work schedule.
  
• Almost two-thirds have experienced labor shortages.
  
• A variety of supplemental payments are being made to workers with no one more favored than another.
  
• There are craft differences in the steps being taken.

Work Schedule

Findings are that close to half of those contactors who responded to the survey has a work schedule of more than 40 hours. When a longer schedule is in effect it is most likely to be 5-10’s. Some schedules of 70 or more hours per week were reported.

Two-thirds of contactors reported working their crews five days a week. There were some working four or six days per week, but very few at seven. Most projects are working one shift and no three shift operations were reported.

Labor Availability

Just over a third of contractors reported that they have an ample supply of craft labor on their projects. Among the remainder, spot shortages outnumbered frequent shortages by a two-to-one margin. The crafts most likely to be experiencing shortages, in order of frequency, are boilermakers, pipefitters and ironworkers.

One means sited as a way of obtaining more workers is to employ travelers. The same three trades most likely to be experiencing shortages were also most likely to use travelers. The difference is that pipefitters most often included travelers over boilermakers.

Travel payments are being made to over one-third of workers. Most often all travelers receive these payments. There are also numerous instances in which all workers receive travel pay.

Other Payments

Also measured was the prevalence of paying subsistence, bonuses and above scale wages. The frequency of these practices was as follows:

Subsistence 31%
Bonuses 22%
Over Scale 29%

Patterns for payment varied. Subsistence most often went to all travelers, bonuses to all workers and over scale wages to all workers in certain crafts. Payment of over scale wages differed from all other payments as it was most likely to cover basic trades.

Robert Gasperow is the Executive Director of the Construction Labor Research Council (CLRC). To learn more about CLRC visit their website at www.clrcdata.org.