Released January 31, 2018 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Greater Pittsburgh, Pennsylvania, area is about to experience a significant shortfall in local skilled craft labor, and that labor availability and productivity likely will worsen throughout 2018 as robust industrial development continues to outstrip the ranks of local craftspeople.
The demand for labor in southwestern Pennsylvania is strong and growing, driven by construction of large gas-fired power projects and chemical processing plants. Work is available not only to local skilled tradespeople, but also a large and growing army of traveling workers from other areas. Traveling laborers are closing the gap between local demand and local supply for several skilled crafts, including pipefitters, electricians, boilermakers and operators.
Click the image at right to see a graphic of aggregate demand and supply for Greater Pittsburgh's 12 construction trades from 2014 to 2021.
Aggregate demand in the Greater Pittsburgh area for 12 construction trades jumped 56% last year compared to 2016, and a further 18% jump is expected this year, according to Industrial Info Resources' proprietary Labor Demand/Supply, Wage and Per Diem Forecaster. For more on the Pittsburgh labor market, see May 9, 2017, article - Surge of Industrial Project Activity in Pittsburgh May Overwhelm Local Labor.
Click the image at right to see a graphic of aggregate demand for Pittsburgh's 12 construction trades.
Pittsburgh's demand for labor is spiking as construction has begun, or is about to begin, on several big-ticket projects, including:
Click on the image at right to see natural gas production from the Appalachian region, which includes the Marcellus and Utica shales.
Another driver of surging demand for labor is the Pipelines Industry. Across the Keystone State, Industrial Info is tracking about $4 billion of pipeline projects scheduled to kick off construction through late 2021. In southwestern Pennsylvania, the largest active pipeline projects include projects that are part of larger projects like the Leach Express, Mariner East, Rover and the Laurel Refined Products Pipeline Reversal projects. All told, Industrial Info is tracking 17 active pipeline projects in the Greater Pittsburgh area with a total value of $765 million that are scheduled to begin construction over the next few years.
As demand for some skilled crafts is expected to escalate beyond local supply, Industrial Info is forecasting an increase in wages and per diem rates. We estimate hourly wages will rise by about $1 per hour for the local skilled crafts in shortest supply, such as plumbers and pipefitters, equipment operators and electricians. That represents a wage escalation of as much as 3% to 4% this year.
Click on the image at right to see a graphic of wage changes in the Greater Pittsburgh area for skilled trade workers from fourth quarter 2016 to fourth quarter 2017.
Contractors and owners are adjusting compensation by paying more per diems, such as paying seven days of per diems for five days worked and paying local workers per diems before they raise wages. This has been the experience in the U.S. Gulf Coast, and we expect the same in the Northeast. So we expect higher per diems being paid for pipefitter, operators and electricians to recruit the numbers that will be required.
"Surging industrial development in southwestern Pennsylvania is forcing project estimators, construction managers and supply-chain officials to revisit their earlier estimates for labor costs and availability in the Pittsburgh market," commented Tony Salemme, vice president of Industrial Info's Craft Labor Group. "Right now, Industrial Info is tracking about 154 industrial construction projects in the Greater Pittsburgh area, valued at about $13.22 billion, that have either begun turning dirt or are scheduled to kick off construction by the end of 2019. We expect that some projects may have to push back their start dates due to the tight local labor market."
Salemme will be a featured speaker at two upcoming conferences in Pittsburgh in June: The Northeast U.S. Petrochemical Construction Conference and Expo and the Gas Power Plant Engineering & Construction Conference. Both events will be held at the Westin Convention Center Pittsburgh on June 18-19. Industrial Info is a Gold Sponsor of both events and will exhibit there. Both events are sponsored by FCBI Energy Limited (London, England).
Industrial Info's proprietary Labor Forecast Analyzer offers a tailored assessment of labor supply and demand for hundreds of metropolitan areas across North America. The analyzer's Pittsburgh assessment shows how horizontal drilling and hydraulic fracturing have transformed that region. Asset owners, project developers and labor organizations use the forecast analyzer to stay ahead of trends affecting supply and demand for skilled craft labor. For more information about the proprietary analyzer or a complimentary online demonstration, contact Tony Salemme.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
The demand for labor in southwestern Pennsylvania is strong and growing, driven by construction of large gas-fired power projects and chemical processing plants. Work is available not only to local skilled tradespeople, but also a large and growing army of traveling workers from other areas. Traveling laborers are closing the gap between local demand and local supply for several skilled crafts, including pipefitters, electricians, boilermakers and operators.
Click the image at right to see a graphic of aggregate demand and supply for Greater Pittsburgh's 12 construction trades from 2014 to 2021.Aggregate demand in the Greater Pittsburgh area for 12 construction trades jumped 56% last year compared to 2016, and a further 18% jump is expected this year, according to Industrial Info Resources' proprietary Labor Demand/Supply, Wage and Per Diem Forecaster. For more on the Pittsburgh labor market, see May 9, 2017, article - Surge of Industrial Project Activity in Pittsburgh May Overwhelm Local Labor.
Click the image at right to see a graphic of aggregate demand for Pittsburgh's 12 construction trades.Pittsburgh's demand for labor is spiking as construction has begun, or is about to begin, on several big-ticket projects, including:
- Shell Chemical Company, a unit of Royal Dutch Shell Plc (NYSE:RDSA) (The Hague, Netherlands), is building a $6 billion ethylene plant
- American Power Ventures LLC (Bernardsville, New Jersey) is building Renaissance Energy Center, a $1 billion, 1,000-megawatt (MW) power project
- Competitive Power Ventures Incorporated (Braintree, Massachusetts) is developing the Fairview Energy Center, a $1 billion, 980-MW gas-fired power project
- Tenaska Incorporated (Omaha, Nebraska) is constructing the Westmoreland County Generating Station, a $780 million, 950-MW grassroot power plant
Click on the image at right to see natural gas production from the Appalachian region, which includes the Marcellus and Utica shales.Another driver of surging demand for labor is the Pipelines Industry. Across the Keystone State, Industrial Info is tracking about $4 billion of pipeline projects scheduled to kick off construction through late 2021. In southwestern Pennsylvania, the largest active pipeline projects include projects that are part of larger projects like the Leach Express, Mariner East, Rover and the Laurel Refined Products Pipeline Reversal projects. All told, Industrial Info is tracking 17 active pipeline projects in the Greater Pittsburgh area with a total value of $765 million that are scheduled to begin construction over the next few years.
As demand for some skilled crafts is expected to escalate beyond local supply, Industrial Info is forecasting an increase in wages and per diem rates. We estimate hourly wages will rise by about $1 per hour for the local skilled crafts in shortest supply, such as plumbers and pipefitters, equipment operators and electricians. That represents a wage escalation of as much as 3% to 4% this year.
Click on the image at right to see a graphic of wage changes in the Greater Pittsburgh area for skilled trade workers from fourth quarter 2016 to fourth quarter 2017.Contractors and owners are adjusting compensation by paying more per diems, such as paying seven days of per diems for five days worked and paying local workers per diems before they raise wages. This has been the experience in the U.S. Gulf Coast, and we expect the same in the Northeast. So we expect higher per diems being paid for pipefitter, operators and electricians to recruit the numbers that will be required.
"Surging industrial development in southwestern Pennsylvania is forcing project estimators, construction managers and supply-chain officials to revisit their earlier estimates for labor costs and availability in the Pittsburgh market," commented Tony Salemme, vice president of Industrial Info's Craft Labor Group. "Right now, Industrial Info is tracking about 154 industrial construction projects in the Greater Pittsburgh area, valued at about $13.22 billion, that have either begun turning dirt or are scheduled to kick off construction by the end of 2019. We expect that some projects may have to push back their start dates due to the tight local labor market."
Salemme will be a featured speaker at two upcoming conferences in Pittsburgh in June: The Northeast U.S. Petrochemical Construction Conference and Expo and the Gas Power Plant Engineering & Construction Conference. Both events will be held at the Westin Convention Center Pittsburgh on June 18-19. Industrial Info is a Gold Sponsor of both events and will exhibit there. Both events are sponsored by FCBI Energy Limited (London, England).
Industrial Info's proprietary Labor Forecast Analyzer offers a tailored assessment of labor supply and demand for hundreds of metropolitan areas across North America. The analyzer's Pittsburgh assessment shows how horizontal drilling and hydraulic fracturing have transformed that region. Asset owners, project developers and labor organizations use the forecast analyzer to stay ahead of trends affecting supply and demand for skilled craft labor. For more information about the proprietary analyzer or a complimentary online demonstration, contact Tony Salemme.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
