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“Analysis of Supply & Demand” Moderator: Harvey Bernstein, Vice President, Industry Analytics, Alliances & Strategic Initiatives, McGraw-Hill Construction Panelists: Robert M. Gasperow, Executive Director, CLRC Construction Labor

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analysis of supply demand

“Analysis of Supply & Demand”

Moderator: Harvey Bernstein, Vice President, Industry Analytics, Alliances & Strategic Initiatives, McGraw-Hill Construction

Panelists:

Robert M. Gasperow, Executive Director, CLRC Construction Labor

George Gritziotis, Executive Director, Construction Sector Council, Canada

panel discussion analysis of workforce supply demand

Panel Discussion:Analysis of Workforce Supply & Demand

Harvey Bernstein, F.ASCE

Vice President, Industry Analytics, Alliances & Strategic Initiatives, McGraw-Hill Construction

why do we need labor forecasts
Why Do We Need Labor Forecasts?
  • Helps with big picture understanding of trends and worker migration
  • Provides insight into changes over time of workforce
  • Provides a springboard to answer some questions about the distribution of trades by building type and geography
slide5

Challenges to Creating Demand & Supply Forecasts

  • Understanding exactly how much labor, by trade, flows into different kinds of construction types
  • Differences in construction practices by geography
  • Understanding the supply of labor by trade & across geographic areas
slide6

Examples of Existing Major Information Sources

  • Department of Commerce’s Economic Census of Construction Industries
  • Bureau of Labor of Statistics Occupational Employment Surveys
  • McGraw-Hill Construction Dodge Construction Project Data
  • SEMTA’s* Southeastern U.S. Open Shop Craft Census Study
  • Construction Labor Research Council’s Database of Labor Costs
  • * Southeast Manpower Tripartite Alliance (SEMTA) has been organized to determine the magnitude of craft labor demand and supply in the Southeast, including the impact of Hurricanes Katrina and Rita; identify ways to minimize potential labor shortages; and develop appropriate action plans
slide7

Specific Outcomes of Demand & Supply Forecasts

  • Projection of overall demand and supply for each of the skilled trades during the intermediate (up to 5 years) and long-term (more than 5 years)
  • Geographic concentration for each skilled trade
  • Determination of the impact that changes in construction practices, building products and worksite management / training may have on skilled trade
slide8

Elements Needed in Labor Demand & Supply Forecasts

  • Understanding the relationship between different craft hours for different project types
  • Construction activity trends, nationally, regionally and by state
  • Construction industry project forecasting methodology and expertise
  • Number of people with occupational skill sets
  • Mobility of labor force
slide9

Current Demand & Supply Forecast Models

  • Construction Sector Council (Canada) Construction Labour Market Information (LMI) Program
    • Workforce supply demand forecasting
    • Canadian national, provincial, metro
  • Construction Labor Research Council
    • Analysis of labor supply through 2015 and specific studies
    • Quantify needs in the Southeast and Midwest
  • McGraw-Hill Construction Labor Demand Forecast
data s role in assuring adequate supply

Data’s Role in Assuring Adequate Supply

Robert M. Gasperow, Executive Director,

CLRC Construction Labor

slide12

To Be Covered

Volume

Demographics

Wages

Government

slide13

Volume

Mix Change

SEMTA

BCTD

Other

slide15

SEMTA

Data Entry

http://www.surveystoday.com/sedemand.html

slide16

Demographics

Aging

New Entrants

Composition

slide17

Labor Force Growth Rate

Total Male 16-24

90 – 00 1.3% -0.1%

00 – 10 0.9 -0.2

10 – 20 0.6 -1.0

20 – 30 0.4 1.0

slide18

Wages

Relationship to Supply

Relationship to Demand

slide19

Track Record

Past Success

Evaluating Entrants

slide20

Government

BLS Projections

Apprenticeship

Voc Ed

slide21

State Projections

http://www.projectionscentral.com

mcgraw hill construction s construction labor demand forecast

McGraw-Hill Construction’sConstruction Labor Demand Forecast

Harvey Bernstein, F.ASCE

Vice President, Industry Analytics, Alliances & Strategic Initiatives, McGraw-Hill Construction

mhc construction labor demand forecast
MHC Construction Labor Demand Forecast
  • Focuses on creating a demand model for skilled trades in the construction sector
    • Over the intermediate term (5 years)
    • Calculates local skilled trade utilization mix
  • Covers U.S. at national, state and local levels
    • The geographic and building type detail in MHC forecasts means projections of demand for the skilled construction trades by building type extends down to the local geography
  • Links building activity with labor demand in ways that are consistent with federal data and McGraw-Hill Construction forecasts and Dodge project data
mhc construction labor demand forecast methodology
MHC Construction Labor Demand Forecast Methodology
  • Uses proprietary Dodge database of construction starts along with projects in the planning stages
  • Uses MHC forecasting models to determine sector forecasts and scale to regional and state level forecasts
  • Uses U.S. government data to determine skilled trade hours in different building types
  • Creation of national, state demand coefficients for state and local forecasts
mhc proprietary project information
MHC Proprietary Project Information
  • Dodge Project Network Database:
    • The most comprehensive source for construction starts data for the entire U.S.
    • Used by U.S. Department of Census for Put-in-Place, which feeds GDP calculation
    • Time series data monthly back to 1967
    • 600,000 active projects
    • 60,000 plans and specifications per year
mhc proprietary forecasting methodology
MHC Proprietary Forecasting Methodology
  • Analytic Analysis:
    • Forecasting models based on the most comprehensive historical database available
    • Econometric models for 22 major construction industry sectors at the national and regional levels
    • State and metro area models
    • Expertise in determining thepercentage of projects that will ultimately reach start (within 5 years)
    • Expertise in determining the length of time to start for projects

construction analysis, forecasts and trends

uses government data to create national demand coefficients
Uses Government Data to Create National Demand Coefficients
  • Create national “demand coefficients” by drawing on two major government information sources to create a table of skilled trade employment per thousand dollars of construction value by building type
    • Department of Commerce’s Economic Census of Construction Industries: Contributions of each construction industry to building activity by building type
    • Bureau of Labor of Statistics Occupational Employment Surveys (OES): Occupational employment for the skilled trades by industry
creating state local demand coefficients
Creating State & Local Demand Coefficients
  • Adjust national demand coefficients to fit state and major metro areas
  • Use OES data & MHC Dodge project data
  • MHC data allows for impact from large projects
  • These calculations are performed to produce trade hours per $1000 of construction by building type
creating local and state skilled trade forecasts
Creating Local and State Skilled Trade Forecasts
  • Multiply the demand coefficients by the corresponding McGraw-Hill Construction forecast by building type for a state or local level
  • Sum each skilled trade across building types
  • Note: The construction mix is crucial in forecasting demand for the trades, since utilization rates vary significantly by building type
labor demand forecast deliverables
Labor Demand Forecast Deliverables
  • Forecast out labor hours for five years
    • By building type
    • By geography
  • National, state and local levels
  • Information by project type
  • Information by skilled trade
  • Information on large project impact on labor demand
electricians in albany schenectady troy ny
Electricians in Albany-Schenectady-Troy, NY
  • Anticipated spike of labor demand in office construction sector in 2007
  • Driven by several large office projects in the planning stages

Actual

Forecast

slide33

Electricians in Albany-Schenectady-Troy, NY

  • MHC examines large projects in the planning queue
  • And evaluates whether projects will go to start
  • This allows for clarity on labor demand forecasts
  • More large projects means the forecast will be more stable versus dependence on one very large project
for more information
For More Information:

Contacts:

  • Harvey Bernsteinharvey_bernstein@mcgraw-hill.com
  • Ralph Gentile, Economistralph_gentile@mcgraw-hill.com

MHC Resource Websites:

  • www.construction.com
  • www.analyticsstore.construction.com
  • www.analytics.construction.com
labour supply and demand

Labour Supply and Demand

George Gritziotis, Executive Director

Construction Sector Council, Canada