More construction firms in Ohio plan to add workers in 2013 than plan to reduce their payrolls, despite concerns about rising costs related to health insurance and materials, according to survey results released by the Associated General Contractors of America.
About 37 percent of firms surveyed in the state said they planned to hire more workers this year, while 13 percent said they intend to lay off workers. About one-third of employers said they did not know if they will reduce or increase the size of their companies, and one in six do not expect any changes.
Construction plays a central role in the local and national economies, and job growth in the sector signals that businesses and employers are investing and expanding.
Ohio has seen decent growth in construction jobs, but the Dayton region lags behind the rest of the state because it has not benefited much from the oil and gas boom taking place at the Utica Shale in Ohio counties.
“Your end of the state has not shared in the growth that is concentrated in the southeast part of Ohio,” said Ken Simonson, chief economist with the Associated General Contractors of America.
Last year, construction employment in Ohio increased, year-over-year, in nine of the 11 months between January and November, according to seasonally adjusted data from the U.S. Bureau of Labor Statistics that was analyzed by the Associated General Contractors of America. Ohio was only one of the 20 states to add construction jobs in November, according to the most recent data.
About 40 percent of Ohio contractors said their payrolls grew in 2012, compared to 32 percent that saw declines, according to the association’s survey of 1,300 contractors nationwide, including dozens in the state.
Of the Ohio firms that plan to hire new workers this year, about 64 percent said they would hire fewer than six employees and 21 percent said they would add between six and 25. About 92 percent of the firms that plan to cut workers said they would lay off five or fewer employees.
Most companies cut as many expenses as they could as a result of the recession, and now they cannot afford to become any leaner, said John Morris, president of the Ohio Valley Chapter of the Associated Builders and Contractors.
“They got as skinny as they could possibly get,” he said. “The only place left to go is up.”
But some construction firms may struggle to fill open positions because many people who previously worked in the industry left for better performing sectors during the downturn, Morris said. He said the good news is there should be decent opportunities for newcomers to break into the business.
“The time is now to consider a career in the trades, because this industry will bounce back and we need trained craftsmen,” he said. “Most companies I think will tell you they are more likely to hire than they are to lay off, but they are concerned where they will find these workers.”
Ohio contractors are also slightly more optimistic than their counterparts nationwide about the chances of the construction sector rebounding sooner rather later.
In Ohio, about 29 percent of contractors said they expect the construction market will grow again in 2013, while 37 percent expect growth will not occur until 2014, the survey found. By comparison, one in five U.S. contractors said they expect the construction market will grow this year, while about one-third said the growth will occur in 2014.
Despite the varied feelings about future work prospects, Ohio contractors reached one consensus: 2013 will be more expensive than 2012.
Nine in 10 contractors in the state said the costs of providing health care will increase this year. More than eight in 10 firms said construction materials prices will also rise.
But Morris said 2013 has the potential to be a good year for construction firms across the region. He said oil and gas exploration and extraction could bring more people and business into the state, which would benefit retail and housing construction.
He said ongoing construction for schools, higher education and medical providers should keep firms busy, and the racino project will provide a major boost.
The racino, located at the former Delphi’s Chassis plant on Wagner Ford Road, is expected to create 1,000 jobs at the facility or related businesses and 1,000 construction jobs throughout the life of the project. The construction costs are estimated at $125 million.
The Miami Valley could use some good news on the building and trades front.
Unlike the rest of the state, the Dayton metropolitan region saw employment in construction, mining and logging decrease for 11 consecutive months in 2012.