Infrastructure projects to compete for skilled labor

 The rush by governments around the world to create jobs and rescue their economies through concentrated spending on infrastructure projects may be tempered by a shortage of qualified workers for so many simultaneous construction projects, several business leaders said last week.

   On Monday, U.S. House Speaker Nancy Pelosi said Democrats are preparing an economic aid bill in the range of $600 billion, with $400 billion devoted to infrastructure. But recent reports have President-elect Obama considering a plan of up to $850 billion over two years, with some economists calling for a $1 trillion package.

   China last month announced a $586 billion economic stimulus plan that will include a heavy dose of spending for infrastructure such as railroads, highways and water conservation projects. Britain, Germany, the European Union and other countries have also recently approved or are debating plans to make large investments in schools, broadband connections, roads and other physical systems in response to the global recession.

   If this nation moves forward with a trillion dollar program, which is very possible, and the supplemental dollars that would be coming from the states and local government, do we really have the manpower to put that kind of construction into play immediately said Douglas Whitley, president of the Illinois Chamber of Commerce, at a conference hosted at U.S. Chamber headquarters.

   Power plant construction, for example, requires about 3,000 people, many of whom flow in from other parts of the country and establish temporary residence in the area for several years. Whitley said that a power generating facility under construction in southern Illinois is drawing workers from 500 miles around. Having multiple complex projects underway at once -- such as bridges, power plants and locks -- could stress the workforce despite the current high unemployment rate, according to industry executives.

   We're already stretched thin, especially with managerial capacity,?said Francisco Wulff, director of infrastructure at the Andean Development Corp., a multilateral development bank controlled by South American countries.

   Salaries for engineers and mangers in the oil industry, for example, have skyrocketed in the last three years as demand for exploration has outstripped professional capacity.

   The labor shortage "could have an effect on prices and speed of implementation of projects" during the next two to three years until the pool of trained workers catches up, Wulff said during a break at another infrastructure conference in Washington sponsored by consulting firm CG/LA Infrastructure. Projects that are better prepared and located will move faster than others, he added.

   Edward Day, executive vice president of engineering and construction services for Southern Co., said at the U.S. Chamber function that the utility is pushing for more support of technical schools and training at the junior high and high school levels, so it can hire more people for high-paying jobs.

   Southern lost many skilled workers who build and maintain facilities after they migrated to the Gulf Coast for lucrative jobs helping repair refineries in the wake of Hurricane Katrina three years ago. The demand for workers put upward pressure on labor rates and forced the company to postpone some projects that became uneconomical, he said.

   That supply-demand imbalance is still there. We're still getting our work done, but what has happened is as workers have migrated into a region to pick up jobs our quality has suffered some. 

   You've got individuals in some of our facilities now that are not necessarily used to working in a heavy industrialized environment and so your safety becomes an issue, your quality, your productivity. And so we're taken a step back and said we're really got to place an emphasis on training and recruitment, Day said.

   The company, which has about 8,000 employees, has also ramped up its own retraining programs.

   Whitley, who took a three-month leave of absence on Monday to consider a possible political career, said the current economic crisis has a silver lining. To paraphrase Dickens, it's the worst of times, but could very well be the best of times because not only are we going to put people to work in a significant way, quickly, but we抮e also going to change this workforce significantly in order to put those dollars in play.

   It's really a job training opportunity. People looking for tomorrow's jobs can be incited to look at the construction trades. I think it's pretty dramatic what we could be on the verge of,?he said.

   Day said the rapid infrastructure investment requirements underscore the fact that there is little domestic manufacturing capacity for construction equipment, heavy machinery, and materials that are largely sourced from overseas. He wondered whether the current interest in infrastructure will be sustainable and generate consistent dollars to allow some of the heavy industrial production to recreate itself in the United States.

   The United States faces a shortage of engineering, scientific and manufacturing resources that forces utilities to import technology for taking impurities out of water, added Jerry Johnson, general manager for the District of Columbia's Water and Sewer Authority. 

Source: American Shipper