Alaska's construction industry faces growing shortage of workers

A custom homebuilder in Anchorage said it can now take a full year to complete a house, twice as long as they once did, because workers are hard to find amid a labor shortage that’s predicted to get worse.

There aren’t enough framers to erect walls, so concrete foundations can sit untouched for months on end in a “painful waiting game,” Bill Taylor said. Electricians, plumbers, sheetrockers, roofers and others are in high demand, too, so labor costs are higher.

“It’s been going on aggressively since COVID,” said Taylor, who owns Colony Builders with his wife, Tami. “And costs have risen dramatically as well because there’s only a small pool of qualified laborers to do our subcontract work. That’s another ugly aspect.”

The lack of construction workers, skilled laborers and even architects and engineers is a problem across the economy, including nationally. But it’s raising unique concerns in Alaska’s construction industry.

Billions of dollars in federal projects have begun flooding into the state from the $1.2 trillion infrastructure measure and other congressional actions. Major oil field investments, such as ConocoPhillips’ Willow project, could bring billions more in investments to the state.

But with workers in short supply, many economic observers are wondering if the state will get the full economic benefit of those dollars.

Some Alaska jobs will end up going to people who live outside the state and work remotely or fly in for long stints, reducing the flow of money in the state, said Bill Popp, head of the Anchorage Economic Development Corp.

“We’ll have billions of dollars invested in our state, which is fantastic, but will we get all of the construction jobs and operational jobs related to those investments?” he asked.

He’s concerned that a lack of workers will hamper economic growth in Alaska for years. “This is probably the biggest threat our state faces.”

The labor shortage has affected all kinds of businesses across the U.S. and Alaska as more people retire post-pandemic, take on part-time work or run a household, experts say. Meanwhile, hiring remains strong.

Years of population loss adds to the problem in Alaska, after many workers left for better economic prospects in the Lower 48, Popp said.

With other states also seeing increased federal investment, there’s a fierce national competition for workers. But wages in Anchorage haven’t kept up. They rose 9% in 2022, to just over $68,000. But they’ve fallen below the national average in recent years, Popp said.

Patrick Taylor, an architectural designer who works for his parents at Colony Builders, said many of his friends and fellow 2012 graduates from South Anchorage High School have moved away to the Lower 48.

They don’t plan to return, he said. They can make about the same as they do in Alaska, but the cost of living is cheaper, he said.

“Our winters are hard for a lot of people, and you’re not getting rewarded for living up here as much as you used to,” Taylor said.

Colony Builders has had some subcontractors “get up and go because their phone rang and they got 20% higher offers,” he said. “Framers are getting top dollar for their work.”

It’s also difficult to find the structural engineers who make sure houses and buildings are properly designed and built, said Marco Zaccaro, who owns Z Architects in Girdwood. That shortage is causing delays of around six months on some projects collectively worth several million dollars, he said.

The shortage of engineers began when the 2018 Anchorage earthquake boosted demand for their services, Zaccaro said. But their numbers shrank to critically low levels when many retired during the pandemic.

Engineering firms are making the best of the situation, he said.

“But we can’t get them to look at our project for months on end, or they are just really overworked, so then it’s hard for them to do as thorough a job as maybe they once did,” he said.

John Thornley, senior geotechnical engineer with WSP USA in Anchorage, said a shortage of engineers means work for some Alaska projects will be carried out in the Lower 48.

Companies prefer Alaska engineers to work on Alaska projects because of the unique challenges of project design in cold regions.

But so much work is coming into Alaska from the infrastructure development bill that some clients, such as developers or government agencies, are talking about looking Outside to find engineers to complete projects, he said.

Greg Latreille, a principal with BBFM structural engineering firm in Anchorage, said the company recently needed eight months to fill a single position, far more time than it once took.

BBFM’s workload includes water and wastewater improvements in rural Alaska tied to the pandemic-era stimulus bill known as the CARES Act, he said. More work is on the horizon and it’d be nice to take on more projects, he said. But the tight market for engineers has made the company extremely selective in the jobs it pursues, he said.

Anchorage’s labor shortage is expected to continue growing in the next few years as workers age out of the workforce, Popp told Anchorage business leaders at a luncheon last month where he released the Anchorage Economic Development Corp.’s three-year forecast.

By 2026, the city will have lost 10% of its working age population since 2013, representing a reduction of 21,500 workers, he said.

Popp said the number of people employed in Anchorage but living out of state, and either working remotely or flying in for multi-week shifts, has grown and stands at 13%. “This will likely only increase in coming years,” he said.

Some industries in Alaska, such as oil and gas, have always had significant Outside workforces, he said. But that situation has spread to other sectors such as accounting, health care, legal and construction.

Labor unions and employers are racing to train young Alaskans for the work that’s coming, said Joelle Hall, president of the Alaska AFL-CIO federation of labor unions.

Many unions in Alaska have roughly doubled their apprenticeship classes. She said the programs will turn out electricians and other skilled laborers. Some will make $80,000 or more annually starting out. It will take a few years to fully train them, but they’re also paid during that training.

“If you’re a kid who wants to delay going to college, this is 10 years of steady work and good high-paying jobs, and you can still go to college later,” Hall said. “This is a challenge we’re thrilled to have because this is an opportunity to put so many Alaskans to work and have that generational shift in the construction industry.”


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