Local contractors wrestle with growing worker shortage

With permits and groundbreakings up, so are some companies' phone calls to Mexico

By Robert Yarbrough
News correspondent

With a recent surge in home remodeling — and a major uptick in home construction on the horizon — construction worker shortages might soon become a troublesome fact of life for Nashville-area general contracting companies.

Such a shortfall has its roots in the Great Recession, when a large part of the industry’s men and women either left the sector for other work — think auto manufacturing — or dropped out of the workforce altogether. Nationwide, the construction sector is still down 2 million jobs since January 2008, the nation’s peak employment month, according to the U.S. Department of Labor Bureau of Labor Statistics.

And while the remodeling needed after spring hailstorms hit Middle Tennessee brought to town a large number of workers from outside Tennessee, many of them have since left the state.

That has some local businesses reaching out to old friends. According to John Hart, a freelance home designer who is known, in part, for his work with his brother Michael’s Hart Enterprises, many local subcontractors have had to resort to “calling Mexican families to bring workers back” to Middle Tennessee.

“Many left when the economy crashed,” he said, leaving behind the sector and the region.

Asked to predict when major home construction would resume — thus spurring the need for hundreds of carpenters, concrete specialists, roofers and the like — Hart said, “It already has. We get two to three calls a week for new projects. People are done waiting [for the recession to end].”

One statistic seems to bear that out: The total number of single-family construction permits in the Nashville MSA in the first seven months of this year rose by 32 percent from a year ago to more than 3,000. But Tim Harvey, who owns TDS General Contractors — a Nashville-based home repair company active in both Davidson and Williamson counties — paints a less sturdy picture of the local housing market.

“We are still a year or so out from full-scale home construction resuming,” he said. “There has been some new construction going on, but most of the construction I have seen happening has been remodeling.”

According to Harvey, most of the remodeling that has happened in recent months was done to repair the damage many houses sustained from the severe hailstorm that hit Nashville in March. Harvey also told The City Paper many people needing more living space have opted to “add on instead of moving” to avoid spending significantly to buy a house in the current economic climate.

Interestingly, the majority of the remodeling done in the wake of the hailstorm wasn’t confined to any one specific area of Middle Tennessee. On the contrary, companies like TDS have remodeled homes “anywhere from Antioch to Belle Meade.”

Although general contracting companies like Hart and TDC were able to adjust to recession conditions by becoming remodelers instead of builders, many home suppliers were not so fortunate. Indeed, the owners of Hart Enterprises said the number of specialized home supply businesses operating in the Nashville area fell drastically after the recession hit in 2007.

“Several lumber yards have gone out of business in recent years, but the recession has gotten rid of a lot of improperly run companies as well,” said Hart. “As a result, there is a lot less competition than there used to be.”

The recession did not exclusively affect those in home construction, however. Those interviewed for this story say they — or those they have talked to in the industry — have seen a gradual decline in the number of local commercial construction workers as well. And because the number of larger commercial projects being undertaken throughout Nashville is steadily increasing — think of Elliston 23, Hyatt Place and Pine Street Flats, among others — the worker shortage could easily become much more noticeable — and more damaging — to construction companies in the near future, the sources said.

Encouragingly, the situation is far from universally dire. Workers can be found and paid an hourly rate that still allows the construction companies to fare reasonably well.

“Our construction revenue will be up this year by between 25 percent and 30 percent,” said Bryan Hay, vice president of business development at Hardaway Construction.

Contractors in the area generally agree about the shortage of workers the industry has been experiencing. But Shane Teeters, founder of Meridian Construction Co., offered quite a different perspective.

“There is no shortage of construction workers right now,” he said. “The biggest problem I’ve seen is that there aren’t enough construction jobs for young men to have a safety net like they used to.”

Teeters added that since many people have stopped looking for jobs at this point, the real unemployment rate is more accurately about 20 percent. But unlike Hart Enterprises, his Meridian team has not contacted any workers who live in Mexico — at least not yet.

“Workers come when they are needed to accommodate various spikes in the market,” he said. “Pay usually goes up when this happens.”

Another factor to consider: The end next spring of work on the massive Music City Center will bring to market hundreds of skilled workers. If we hear of major labor shortages after that, it will be for all the right reasons.