Pandemic squeezes materials and skilled labor in building, construction

Demand for skilled trades talent is intense. Homebuilders are coping with pandemic-driven disruptions in the supplies of materials. Tom Martin, host of Eastern Standard on 88.9 WEKU discussed these issues with Todd Johnson, Executive Vice President of the Building Industry Association of Central Kentucky. Todd also heads the Building Institute of Central Kentucky where the mission is to educate and train future skilled trades talent related to the residential and commercial construction industries.

Martin: Bring us up to date on the job market in skilled trades. What does that demand look like today?

Johnson: It’s as strong as it has ever been. … It’s the result of coming out of the recession where we had such a mass exodus from the skilled trades not only in our market, but across the country. People just simply left the industry. It’s been tough for a long time getting people coming into the industry. It used to be kind of a generational thing and that has shifted completely away from where father would have the business, son would take over or daughter would take over. We’re seeing less and less of that. We’re seeing more of our skilled trades folks, whenever they reach that retirement age, their kids have gone on and done something else and there’s really no succession plan. If they’re large enough, they’re maybe merging with a larger company that buys them out or they’re just closing up shop and going to the lake house.

Martin: What skills are most in demand these days?

Johnson: We see a high demand for our electricians, our plumbers, and our HVAC graduates. When they started with us in September, some of these young men and women already had jobs that we were able to facilitate within our membership before they started school. But the vast majority of them got picked up right away as soon as school started. All the trades are in demand. I was talking to our electrical instructor and he was in contact with a headhunter for the trades looking for about 30 electricians for a big project that’s going on just north of us. They’re scrambling all throughout Central Kentucky, trying to find these folks. The starting salary for those jobs was $17.50, and that’s basically for a laborer before they really know any of the true skills because they’re still learning, and then journeyman wages and masters wages go up from there.

Martin: What is happening during this pandemic in the Central Kentucky homebuilding industry?

Johnson: Well, it’s been something nobody would have ever expected. When we first got wind that a pandemic was upon us in late February, early March, our industry probably took their foot off the gas for just a little bit just to figure out what was going on around us and soon saw that the consumer demand was still very high and very strong. They put their foot back on the gas and have been going as fast as they can go to meet the demand. We rely a lot on offshore products to meet the demand of new housing - some electronic components, a lot of lighting fixtures. Appliances are a big one. Some of those countries that produce those for us had a big hit from the pandemic, as well and had to shut down or adjust their manufacturing schedules, which has caused a lag in the market. But it really didn’t hit until early summer. Then lumber did the same thing in the manufacturing and production of sheeting material and boards that are used in construction. It was just ramping up in March to really meet that high demand coming in May, June, July, and August. They kept their foot on the brake a lot longer thinking that this was just a blip, and that really put them behind in production. I’m sure you’ve heard of the lumber spike that we’ve been dealing with since August where lumber has just gone far out of sight in price. That’s really impacted our industry in a negative way. It’s really been hard on the consumer that had contracts that weren’t expecting this 40 percent to 50 percent increase in lumber prices coming in. Speculative building is probably stalled, if not stopped, in most cases, just waiting to see how things level off from lumber. That’s where we’ve been over the last few months.

Martin: That situation with lumber, is that leveling off now or is it still continuing?

Johnson: It stopped going up for the most part right now. We’re seeing a little bit of relief in board lumber like two by fours, two by sixes, two by eights. Sheeting material is still up as high as it has been since it started going up. The futures look like the price is leveling off. We don’t know what it’ll do after the first of the year. Logic would tell you that we’re going into a slow season for construction across the country, so demand would naturally be down. Hopefully, that’ll give a little bit of reprieve on prices if the demand backs off a little bit just naturally seasonally. We’re hopeful that the lumber industry will ramp up and get back into their big groove in early spring, getting ready for the busy season again next year and bring prices back down to somewhat normal levels.

Martin: I think it’s fair to say that a lot of us are finally making peace with the realization that we’re going to be working from home for the time being. I’m wondering if that is resulting in an uptick in remodeling to accommodate that.

Johnson: Yes, it’s impacting remodeling, as well as new construction. I had one developer tell me he’s getting ready to start a new project. I think it’s in Georgetown, but he stopped. His plans were almost finished. What he was hearing from his potential buyers was, “I’m going to have to have a home office,” so he redesigned four of his plans that he was getting ready to put on the ground and added an area that could be a flex space for a home office to be added in. That’s a big demand among consumers today. We’re also seeing a lot of our builders own a lot of rental property and they’re having some of their renters come to them and say, “Hey, during this pandemic, I’ve had to live in this apartment and I really don’t like apartment living as much as I thought I did. I’m ready to start looking at a single family house where I’ve got a little bit more privacy and I’ve got more room to have an office at home and work from home and just have a little bit better quality of life.”

Martin: Let’s talk about the Building Institute. Are you seeing a response to the demand for skilled tradespeople?

Johnson: We had great recruitment for the September start of our school this year. I’m very pleased to report that probably over 95 percent of those students already have jobs, but demand keeps growing. We’re actually looking at doing another recruitment cycle for January to start up another cohort and at least two with the trades.

Martin: When is the next opportunity to register for classes?

Johnson: We can go ahead and get folks enrolled and they’ll have an opportunity to come in and maybe sit through the class if they’re undecided. If they want to do plumbing, electric, or HVAC, they can sit in each class a night or two, if they want, get a feel of what they want to do. As soon as they’re enrolled, we’ll start helping them try to get placed in a job. We’re not a job placement service. We always caveat that we can’t guarantee that anybody’s going to get a job, but we certainly provide all of our students with an opportunity to be hired if they can make the cut to get it done.

Martin: Is there a way to check out the building institute online?

Johnson: Yes. You can go to our website, which is biacentralky.com. There’ll be a landing page there and you can go right into the building institute. We like to meet with all of our students in person, a lot of our younger folks that might just be out of high school. We welcome mom and dad to come if they like and see the school and talk about the programs with us. For those who tried college and it just wasn’t for them or they’re hesitant about going back on the path that they’re on, we have a lot of folks in our school who have been to some college and just found it wasn’t for them and are finding success in the trades.