Looking Into Construction
FROM SHACKS TO SKYSCRAPERS, THE INDUSTRY TODAY, THE FUTURE OF THE INDUSTRY, EMPLOYMENT OPPORTUNITIES
Construction is one of our nation's most vital industries, providing jobs for almost nine million workers. In 2004 more than 5.2 percent of the nation's total workforce was involved in some aspect of building, renovation, or demolition. The products of this industry include single-family houses, apartment buildings, suspension bridges, electric power plants, and tunnels far beneath the earth's surface.
Construction is also one of the cornerstones of the U.S. economy. More than eight hundred thousand construction firms operate in the United States, accounting for billions of dollars in new building activity each year. The industry is volatile, however, as it is constantly reshaped by new technologies, environmental regulations, and economic trends. Interest rates and equipment and material costs affect the amount home buyers and businesses can spend, and federal and state budgets control funding for schools and other public projects.
Employment in the construction field is very different from that in other industries. First, employees are often hired for specific jobs, so they may move on to other employers and other projects after a job is completed. Second, workers are associated more with a specialized trade than with a particular employer or company. Construction work requires workers with a wide range of skills and talents. From the civil engineer to the general contractor to the stonemason, each worker brings particular abilities and knowledge to the construction process. Third, working conditions in some areas of construction can be perilous. Finally, employment prospects are often unpredictable.
FROM SHACKS TO SKYSCRAPERS
Throughout history, construction has played a central role in human society. Structures have always been built for specific practical functions, such as shelter, but they have also expressed humankind's deepest artistic instincts and spiritual beliefs. Structures built to house rulers or to glorify gods were often physical manifestations of the importance of the ruler or deity.
Because they lacked modern transportation and construction technology, ancient builders had to rely on the materials on hand, as well as a staggering number of laborers. It took more than a hundred thousand workers many years to build the Great Pyramid in ancient Egypt. They had no cranes to lift the giant limestone blocks, yet they were able to create an awe-inspiring structure that still stands. Similarly, the Romans built sophisticated structures, such as the aqueducts that crisscross parts of Europe. Many principles of ancient Greek and Roman architecture are still applied today.
Construction methods changed little until the Industrial Revolution in the nineteenth century. With the advent of the railroad, builders could obtain materials from far away. Mass-produced construction materials, such as steel, allowed them to build different kinds of structures in far less time. As society shifted from its agricultural roots to an industrial base, cities began to grow. Increased immigration at the turn of the twentieth century also created a need for more urban housing, while providing the country with a large, capable workforce.
Construction and the Economy
Throughout the twentieth century, the construction industry reflected the expansion and contraction of the U.S. economy. Periods of sharp decline followed years of rapid growth.
During the first two decades, growth was brisk. But then the stock market crashed in 1929, which led to the Great Depression. The industry fell into a severe slump. It revived as the economy recovered, and by the time the United States entered World War II, the industry was thriving again.
During wartime, the government put restrictions on nonessential construction activity. So when the war ended, the industry entered a period of dramatic growth. U.S. materials, labor, and technology were needed to build or repair infrastructures throughout war-torn Europe. In the United States, returning soldiers started families and bought new houses. The children of this population explosion would come to be known as baby boomers. Throughout the next forty years, construction activity mirrored the business cycle, dropping at periodic intervals and recovering with the economy in general. Overall, the industry saw steady growth.
THE INDUSTRY TODAY
By the middle of the 1980s, commercial and multi-family-home building was booming, making up about a third of total construction spending. By the end of the decade, however, the supply greatly exceeded the demand. Real estate developers started fewer projects, resulting in layoffs and unemployment throughout the industry.
The U.S. economy was in recession as the 1990s began. Unemployment rates rose, and consumers had less money to spend on new homes. The savings and loan crisis closed hundreds of lending institutions. Other banks grew apprehensive about lending funds or giving credit. As a result, the demand for new housing fell sharply. Department of Housing and Urban Development figures show that multifamily-housing starts fell to their lowest level in thirty-five years. Commercial and industrial builders felt the credit crunch as well. They require heavy financial backing, but many lending institutions were not willing to take the risk. The drop in commercial and industrial construction during the recession accounted for a significant drop in the gross domestic product (GDP).
By the middle of the decade, the economy began to recover, and the construction industry rebounded. Residential construction was the first sector to revive. Mortgage rates hit bottom in 1993 and did not increase significantly for more than a decade. Low rates, coupled with the widespread use of variable-rate home mortgages, fueled a thirst for new building. It had only started to subside at the end of 2005.
The Shape of the Industry
The construction industry is unique in a number of ways. Each of its products—a home, a highway, or a shopping center—is custom-made, requiring a specific combination of skills and resources. Each carries its own price, based on the ever-changing costs of labor, materials, and land. Perhaps most important to those who seek careers in the industry is the fact that construction workers are usually employed on a project-by-project basis. Long-term job security is available only for those employed as managers of large construction firms.
A construction project is usually commissioned by an individual, a business, or the government. The person commissioning the project is called the owner. In most cases, the owner hires professionals, such as architects and engineers, to design the structure and a general contractor or a construction management company to do the actual building.
General contractors coordinate entire construction projects, from locating materials to hiring the specialty-trade subcontractors who do the bulldozing, plumbing, and carpentry. General contractors usually specialize in a particular type of work, such as commercial construction. Construction Managers Construction managers are usually hired by companies to supervise large construction projects. They oversee the architect, engineers, and general contractors hired to complete one or more projects.
An owner often chooses a general contractor through a bidding system. First, the owner places an advertisement describing the project. Contractors then review the documents that list the objectives of the project and submit cost estimates, or bids. Many factors influence the contractors' decisions—the cost of materials and labor, the time the job will take, and the profit they want to make—so competing bids can differ greatly. The owner hires the contractor who submits the most appealing offer.
Other construction jobs—usually government projects—are awarded through closed bids. In this system, the owner invites specific contractors to submit bids. They may own the heavy machinery needed to build an airport runway, for instance, or to dig a subway tunnel.
Subcontractors usually work in one specialty trade, such as plumbing, masonry or carpentry. A general contractor hires many different subcontractors to complete a project. On very small projects, subcontractors may do the work themselves, but for larger jobs, they hire their own work crews.
A large number of construction workers learn their trades as apprentices, working alongside skilled union members. Others get experience through classes at vocational and technical schools. For some jobs, a bachelor's or master's degree in construction science has become essential. A college degree in civil engineering is highly desired by large construction companies.
The majority of single-family and multifamily homes are built by local contracting firms, many of which have only a few employees. This allows plenty of opportunity for small business entrepreneur; it also means that competition can be stiff.
Large residential construction companies usually develop subdivisions. Acting as both owners and contractors, they buy a large piece of land, divide it into plots, put in streets and other infrastructure, and then sell homes to buyers. The houses often appear similar—as if they were shaped by a giant cookie cutter—but each has its own distinctions. Home buyers can choose from several floor plans and "upgrades," such as a brick exterior. The construction companies, by hiring their own building crews, can guarantee a certain level of quality and, often, better prices. Because of their size, the companies can also make financing easy and affordable for home buyers.
Manufactured housing is a sector of the industry that has seen slow but fairly steady growth. A manufactured home, also called a mobile home, is assembled in a factory and then moved to its permanent site. Manufacturers can offer high construction standards—each house is built according to federal codes and is inspected frequently during construction—and extended warranties. The manufacturers say their homes cost from ten to thirty-five percent less than a similar site-built home. Through the use of computer-assisted design, many companies can now customize a manufactured home to fit a buyers' taste. The more the house is customized, however, the less the home buyer saves.
A modular home is built from prefabricated pieces that are assembled on the home buyer's lot. The pieces are built in the seller's shop, trucked to the site, and erected by the seller's construction crew. Usually, a modular house goes up in much less time than it would take a local contractor to build a similar home.
Jobs in Residential Construction
Carpenters are by far the largest group of skilled workers employed in residential construction. Plumbers, electricians, roofers, and bricklayers are also in demand. Over the next decade, many of the opportunities in residential construction will probably involve renovation rather than new construction.
Commercial construction contractors build restaurants, nursing homes, shopping centers, and other business-oriented establishments. Their projects involve large work crews and may last for more than a year. Over the next decade, commercial construction is expected to grow faster than residential building. Renovation and replacement of existing malls and office buildings will match changes in the nation's demographics.
Jobs in Commercial Construction
Commercial construction firms are usually much larger than their residential counterparts. Opportunities exist for such specialty-trade workers as glaziers, carpenters, painters, paperhangers, and ironworkers. Large firms often employ civil engineers, architects, and other design professionals.
Industrial-construction projects are big—building a new car-manufacturing plant, for instance, or renovating an existing food-processing plant. The skills of hundreds of workers are needed, so the construction companies employ hundreds of workers. They often hire their own engineers, drafters, and labor-relations experts.
Jobs in Industrial Construction
Industrial construction is expected to expand over the next decade, more quickly in some parts of the country than others. Opportunities in this part of the industry will exist for bulldozer and crane operators, ironworkers, and many of the specialty-trade workers involved in commercial and residential construction. Some large corporations hire construction managers to oversee their projects.
The U.S. government is the largest employer of workers and the largest funder of projects in the entire construction industry. Highways, bridges, dams, hospitals, airports, and prisons—almost any project funded with taxpayer money—fit into this category. Much of the employment results from renovation and repair. Without continual updating, the nation's roads, bridges, and tunnels would not be safe for traveling.
Jobs in Public Works Construction
Bridge, highway, and prison construction provides the greatest opportunities in this field. Jobs will plentiful for operators of heavy equipment, such as bulldozers and cranes, as well as ironworkers, cement masons, and other skilled-trade workers. As the baby boomers grow older, the need for building and renovating hospitals and health-care facilities will increase. The "echo boom"—the children of the baby boomers—are starting to have their own families, which will require new and renovated schools.
Managing a construction project take skill. Deadlines must be met, building codes followed, and supplies and workers organized. A project's workforce often consists of many specialty-trade workers who focus only on their own specific functions. Without proper guidance, even a small project can become disorganized and chaotic, resulting in wasted time and wasted resources. To stay within budget, a construction manager must be able to deal with any number of personalities, have sound computer skills, and possess the ability to see a project from start to finish.
The Construction Site
Who is in charge at the construction site? Usually it is the general contractor, but it may be the design professional hired by the owner. Some design firms employ engineers, inspectors, and surveyors who are trained in construction management. Some states have laws that dictate who can be in charge at a construction site, as well as who is responsible for safety and emergency work stoppage.
The industry has developed management techniques and computer software to coordinate the complex network of workers, companies, resources, and schedules involved in a construction project. Contractors and their staffs keep track of payments by computer, as well, so they know quickly if they are staying within budget.
THE FUTURE OF THE INDUSTRY
The construction industry changes rapidly, influenced by new technology, demographics, environmental safeguards, and worker safety and health care. Just as the railroad and steel mills revolutionized the construction industry more than a hundred years ago, new building materials, computer software, and many factors influence contractors' decisions.
Every year, existing materials are improved and new products go to market. For example, high-performance concrete is now used to build stronger and more durable structures that are able to support more weight than those built with standard concrete. Stronger steel, fiber-reinforced plastic, and weather-resistant paints and sealants have changed not only how structures are built but also how often they need to be renovated and repaired. Products made from recycled materials have become more economical, meaning less waste. Even a building's steel frame can be made from junkyard leftovers.
Computer-assisted design (CAD) software is used on nearly every type of construction project. It allows architects and engineers to design three-dimensional objects and, by rotating the images on the screen, discover potential problems much earlier. Surveyors have their own computer software that maps the size and contour of plots of land. It uses data gathered through the Global Positioning System, which records signals transmitted from satellites above the Earth. Surveyors' calculations have become more accurate and efficient.
Even the tools that specialty-trade workers use are being transformed. They are generally lighter, sturdier, and quieter than their predecessors. Saw blades made from new alloys remain razor sharp. Lasers are used to make accurate alignments and to make precise cuts in materials. Instead of batteries, magnets power some of the latest tools.
The Effects of Demographics
Most home buyers are between the ages of twenty and forty-nine, so construction increases when a larger percentage of the population fits into that age group. Over the next decade, the numbers in that category will shrink, which is one reason a slowdown in housing starts is expected.
However, middle- and upper-class retirees tend to buy new homes, which is evident in Florida and the Southwest, where retirees have spurred a healthy housing market. Retirement communities are likely to multiply over the next decade as baby boomers become senior citizens. In addition, the population aged eighty-five and older will grow about four times as fast as the total population throughout the decade, according to government statistics. They will increase the demand for nursing homes and other health-related facilities.
Immigration is an additional factor. Between 1980 and 1990, immigration to the United States rose to about seven million people. Immigration was even higher—about eight million people—between 1990 and 2000 and has increased thirteen percent since the beginning of this century. Industry observers suggest that many of these immigrants will become home buyers, fueling the construction industry.
Over the past twenty-five years, the construction industry has become much more environmentally aware. New technologies—combined with a growing appreciation of the limited availability and depletion of natural resources—have led construction workers to rely more on recycled materials and on "earth-friendly" practices.
Environmental regulations have made construction more costly, but they have also forced industry workers to develop better skills. New systems are in place to dispose of hazardous substances at construction sites, and new paints and adhesives require fewer toxic solvents for cleanup. Builders and architects now site houses and other structures to make use of the sun and wind for heating and air-conditioning.
Worker Safety and Health Care
Construction sites continue to be hazardous, although the safety record has improved dramatically. Some construction materials once thought to be safe, such as asbestos insulation, have proved to be dangerous. Although such materials are no longer used in new construction, older structures may contain them. Workers who renovate such structures are now more aware of the dangers and have better protective gear to use when they remove and dispose of toxic materials. The additional paperwork and inspection required by compliance with government regulation can result in higher costs, which get passed on to the consumer.
A related issue is rising health-care costs for workers, particularly the cost of health insurance and workers' compensation. Industry observers say those costs will eventually be passed on to the consumer as well, affecting the demand for housing and other construction.
Employment in the construction industry is expected to grow by eleven percent through 2014, compared to the fourteen percent increase projected for all industries as a whole. Many of the construction jobs will most likely shift from residential construction to commercial and public-works construction because the nation's aging factories and bridges need replacement and repair.
The future may also bring a more competitive job market. In 1992, the average age of workers was just over thirty-seven years old. By the year 2014, the average age will be over forty. As a result, more experienced workers will probably be vying for the same positions.
One of the fastest-growing construction careers between now and 2014 will be that of construction manager. The size and complexity of many construction projects, along with the use of new methods and materials, will increase the demand for well-educated and experienced people to manage operations.
Jobs for Women and Minorities
Women and minorities have increased visibility in the construction industry, but not all doors have opened completely. During the recessions of the 1980s and 1990s, apprenticeship programs were curtailed, which meant that fewer minority workers were able to prepare for construction jobs. Those already in the industry were often among the workers with the least experience. When jobs were scarce, they lost out to senior workers. However, many large construction companies are making special efforts to hire women and minorities.
African-Americans, Hispanics, and other minorities have been entering the construction trades in greater numbers since the civil rights laws were enacted forty years ago. Some industry experts suggest that women and minorities who want jobs in construction may find the most success as self-employed entrepreneurs. Today, women and African-Americans account for half of those entering professional design programs.
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