Developers Could Be Slowed By Lack Of Construction Workers Pros Say
Written by Tom Harlan on January 27, 2005
By Tom Harlan
Groundbreaking on some high-rise condominiums could be delayed by a shortage of construction workers in Miami-Dade County, industry observers say.
The county’s construction industry will have a stellar year because so many projects are going on line, said Pepe Cancio, president and CEO of Supermix. Construction has started on such major projects as Met Miami, 50 Biscayne and the Plaza at 900 Brickell in the past couple of weeks, he said.
Overall, 233 major projects are being developed in Miami and other work in the county swells the total.
But future projects may face construction delays because many workers migrated north to repair homes damaged by last year’s flurry of hurricanes, Mr. Cancio said.
"It was their opportunity to start a business," he said. "It was guaranteed work."
"Generally we are finding construction to be very strong statewide, especially in areas affected heavily by the hurricanes," said Warren May, communications director for the Florida Agency for Workforce Innovation, the state’s labor department.
Construction jobs in Miami-Dade County grew to 4.3% last month from December 2003, Mr. May said, led by 4.3% growth in specialty contractors.
"Looking out to the future, we see a slightly lower rate of growth," he said, adding that the agency is updating its statistics. "But general contractors are still at 3% annual growth."
South Florida’s labor force was affected by the hurricane season, said Jay Fraser, vice president and general manager of Turner Construction Co.’s Miami office. Based on the number of residential projects coming on line, he said, construction workers who stayed here will be highly sought.
"There does not appear to be enough qualified, capable labor to effectively manage the amount of construction out there," Mr. Fraser said.
Subcontractors and vendors will raise prices because of a short supply of workers, he said.
Construction companies must make sure subcontractors can handle their workload during contract negotiations, said Brad Meltzer, president and owner of KM Construction Co. "We need to do our due diligence when rewarding subcontractors with contracts."
Clients should measure the cost and time parameters of their projects against what is available in the market, Mr. Fraser said. After considering design, management and construction labor, he said, developers may not have enough resources for their projects.
"It’s a very significant challenge facing the industry in South Florida," he said.
Last year’s major challenge – a shortage of materials – isn’t weighing as heavily on developers now, Mr. Fraser said.
At the end of 2003, materials such as steel and cement were in high demand in Asia and China, creating a low supply in South Florida, industry experts said. The low supply led to higher building costs and construction delays. The industry had sticker shock, Mr. Fraser said, but has adapted to higher prices.
Mr. Meltzer also said the concerns of 2004 such as higher concrete prices are not bothering developers as much now. Prices will continue rising but at a more leveled pace, he said, adding that developers have had a chance to change sale prices accordingly.
Construction in China, which industry experts said consumed a large percentage of supplies last year, is expected to slow in the middle of this year, Mr. Cancio said.
But, he said, the industry may face an aggregate supply shortage in the middle of the year.
Miami-Dade County supplies about 62% of the state’s aggregate supply but there aren’t enough quarries to meet demand, he said.
And after discussing the outlook of the 2005 construction market with the Gulf Coast Builders Association, Toni Pacelli-Hinkley, executive vice president of the Builders Association of South Florida, said some builders are concerned there will be a shortage of roofing tiles.
The tile shortage and a labor shortage, she said, are likely to be the two biggest problems facing builders in Miami-Dade, Broward and Palm Beach counties this year.
But construction experts are optimistic about the future of the South Florida construction industry.
Mr. Fraser said South Florida will continue to lure people to the high-rise residential market.
"We’ve seen tremendous activity over the past few years," he said. "But it doesn’t appear that things are going to slow down anytime soon."