San Antonio's construction contractors are split right now into two camps: the small and midsize firms that are struggling and the big ones that are busy — but also struggling.
The smaller companies are spending a lot of their time hunting for scarce materials such as lumber and drywall, for which they're paying a bundle. Some of their projects continue to be pushed back or canceled when COVID-19 is surging. And they're straining to find workers.
To lure enough laborers to their worksites, they're paying more than they used to. Last year, metro-area builders paid a median hourly wage of $18.95, with entry-level pay at $14.23 an hour, according to data from the Bureau of Labor Statistics.
Many of the city's contractors are also offering bonuses to new hires. And some are paying bonuses to workers who convince friends on other construction projects to quit and join them — which is to say that some contractors are poaching workers from competing firms.
All of that's obviously good for workers, but higher labor costs means contractors have less money to add workers.
On ExpressNews.com: New home construction in San Antonio could break records this year
The employment numbers reflect the turmoil. Between March and June, the industry lost 1,030 jobs in the San Antonio area, a drop of 6.8 percent, according to the Federal Reserve Bank of Dallas.
It was hands-down the worst monthly performance among all industries.
"The recent decline in jobs is likely due to a mix of labor shortages and upward pressure on wages in the construction sector as well as recent cooling in the housing market," said Judy Teng, a Dallas Fed research analyst.
Despite all of that, "San Antonio contractors are still busy and building lots of buildings," said Doug McMurry, executive vice president of the local chapter of Associated General Contractors, a trade group.
As you'd expect.
San Antonio is one of the faster-growing cities in the country. It picked up 107,000 new residents between 2010 and 2020, bringing its population to 1.4 million, according to the U.S. Census. That's a respectable growth rate of 8.1 percent.
So construction of new schools, apartment buildings, houses and places to conduct business remains very much a thing.
And several multinationals are on the scene. Amazon is building two fulfillment centers and two delivery stations in addition to the seven facilities it's already opened in the area; Microsoft is constructing a slew of data centers here; and heavy-duty truck maker Navistar is putting a plant on the South Side.
But the pandemic is still roiling the industry.
For smaller contractors, the scarcity of work and materials can be roadblocks. For large, established firms, they're something less — challenges rather than barriers.
When McMurry says, "There's a group of contractors that are doing very well right now," he's referring to the large firms working in San Antonio. That list includes Joeris General Contractors, Guido Construction, Skanska and Turner Construction.
Bigger companies usually have financial reserves that buffer them against industry slowdowns. They have their bidding processes down cold. They do long-term planning and keep their feelers out for construction projects that are just starting to percolate. They have long-standing ties to materials suppliers and are higher up in the pecking order when supplies are scarce.
On ExpressNews.com: Nonprofit affordable housing builders in San Antonio grapple with higher construction costs, shortages
And, most important, they're good at hiring.
They've had to be. The current labor shortage is only a worse version of the one contractors have faced for years. Before the pandemic, when the unemployment rate hovered around 3 percent, they had a hard time filling positions because laborers had so many opportunities in other, better-paying industries.
Contractors developed apprenticeships for young people, encouraged development of industry programs for high school students and learned where to find workers. And they got by despite the shortage.
Alterman, a nearly 100-year-old electrical contractor based in San Antonio, is part of the select group of companies McMurry referred to, the ones that are staying busy.
In January, Alterman's workforce was the smallest it had been in years, down to 650 electricians, according to CFO Chris Thiel. Now it's up to 1,600.
About 400 of its employees are finishing their third data center for Microsoft Corp. at Texas Research Park on the far West Side and starting the fourth. Another 100 are working on University Health's 12-story, 300-bed Women's and Children's Hospital in the South Texas Medical Center.
Alterman also got in on the Tesla action, winning a contract for the electric car maker's $1.1 billion Cybertruck plant in Austin.
"We are pretty much at the max right now," Thiel said. That means there are projects — including four other data centers — the company would love to bid on but can't because it doesn't have the workforce.
By Thiel's count, the company is bringing on 15 or 20 new workers a week. But it's also losing about 10 electricians per week, either because they find work elsewhere or they find the project they're on too demanding.
The company is employee-owned and its electricians are represented by the International Brotherhood of Electrical Workers. So it can tap the union's national network for recruits. But the San Antonio area's low industry wages — which Alterman's pay reflects — aren't attractive enough to many out-of-state electricians, especially those living in cities like Chicago where workers make more money (because the cost of living is significantly higher).
And Alterman's 6-year apprenticeship program, at the end of which participants secure their Texas journeyman electrician licenses, doesn't come close to meeting its labor needs.
"We have a labor recruiter who combs the city and Rio Grande Valley for us," Thiel said.
The result of its efforts is a lot of workers who are less skilled and less experienced than Alterman is used to. The company has to manage its way around those shortcomings.
Still, no one will shed tears for Alterman. It's one of the thrivers in a wounded industry.
The smaller contractors are the ones taking the worst of it.
"And heaven forbid you're a startup right now," McMurry said.
greg.jefferson@express-news.net
Comments
Post a Comment