Is the construction labour shortage real, or an indication of poor industry productivity?

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ed zarenski mark buckshon
A screen grab from the Skype interview between me and Ed Zarenski (which I will post once I've edited it a bit)

Yesterday, I enjoyed a 45 minute conversation with the 2019 Best Construction Blog competition winner Ed Zarenski. I need to edit the Skype video a bit before posting it here, but discovered some things in the interview that are worthy of sharing right away.

Namely, Zarenski isn’t afraid to observe in his Construction Analytics blog the data suggests that the much-reported construction labour shortage issue may more accurately reflect a productivity problem, rather than a real shortage of workers.

The reason is that while construction volume has been growing for the past several years, outside of the residential sector, the growth has been largely eaten up by cost inflation. In other words, revenue is increasing but so are costs — and the actual building volume is remaining consistent.

Zarenski suggests there has been more growth in the residential side, but this is beginning a decline. As for the overall construction economy, there’ll be a dip in the next few months and then an improvement next year. Looking forward, there is a real risk of a recession — but recent large infrastructure projects will soften the blow, because of their multi-year cycle, meaning if new work declines, there will still be backlog from the existing larger projects.

These thoughts are both intriguing and provocative, and indicate why his blog started three years ago is gaining traction. Viewership has been growing exponentially. He writes:

2016 was a start-up year. The blog had only 7,000 visitors for the year that produced 14,000 views. It wasn’t until the blog became established that more visitors began to view more articles. The number of visitors and article views grew exponentially after that.

Total visitors in 2017 averaged about 2,000/month, but in 2018 grew from 2,000/month at the beginning of the year to 5,000/month by year-end. So far in 2019 though mid-May this blog has had over 30,000 visitors.

In 2019 so far, this blog gets on average about 1500 visitors/week that view about 3000 articles/week.

Total views of all articles in 2017 averaged 5000/mo, in 2018 – 8000/mo and in 2019 ytd – 12000/mo. By the end of June 2019 articles on this blog will have received 250,000 views.

In the interview, Zarenski said the blog is fuelling his consulting business, as businesses and organizations seek interpretation of the construction inflation and economics data as it relates to their local business and marketing areas. This retirement business earns him a quarter of the pay he made as a Gilbane Building Company manager, but it still is rewarding — and obviously his new initiative is growing.

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