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“Analysis of Supply & Demand”
Moderator: Harvey Bernstein, Vice President,
Industry Analytics, Alliances & Strategic
Initiatives, McGraw-Hill Construction
Panelists:
Robert M. Gasperow, Executive Director, CLRC Construction Labor
George Gritziotis, Executive Director, Construction Sector Council, Canada
Panel Discussion:
Analysis of Workforce
Supply & Demand
Harvey Bernstein, F.ASCE
Vice President, Industry Analytics,
Alliances & Strategic Initiatives, McGrawHill Construction
Why Do We Need Labor Forecasts?
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
Helps with big picture
understanding of trends and
worker migration

Provides insight into changes
over time of workforce

Provides a springboard to answer
some questions about the
distribution of trades by building
type and geography
Challenges to Creating
Demand & Supply Forecasts
 Understanding
exactly
how much labor, by trade,
flows into different kinds
of construction types
 Differences
in construction
practices by geography
 Understanding
the supply of
labor by trade & across
geographic areas
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Examples of Existing Major
Information Sources

Department of Commerce’s Economic
Census of Construction Industries

Bureau of Labor of Statistics
Occupational Employment Surveys

McGraw-Hill Construction Dodge
Construction Project Data

SEMTA’s* Southeastern U.S. Open Shop
Craft Census Study

Construction Labor Research Council’s
Database of Labor Costs
* Southeast Manpower Tripartite Alliance (SEMTA) has been organized to determine the magnitude of
craft labor demand and supply in the Southeast, including the impact of Hurricanes Katrina and Rita;
identify ways to minimize potential labor shortages; and develop appropriate action plans
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Specific Outcomes of Demand
& Supply Forecasts
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
Projection of overall demand and supply
for each of the skilled trades during
the intermediate (up to 5 years) and
long-term (more than 5 years)

Geographic concentration for each
skilled trade

Determination of the impact that
changes in construction practices,
building products and worksite
management / training may have on
skilled trade
Elements Needed in Labor
Demand & Supply Forecasts
 Understanding
the relationship
between different craft hours for
different project types
 Construction
activity trends,
nationally, regionally and by state
 Construction
industry project
forecasting methodology and
expertise
 Number
of people with
occupational skill sets
 Mobility
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of labor force
Current Demand & Supply Forecast Models

Construction Sector Council (Canada)
Construction Labour Market
Information (LMI) Program
– Workforce supply demand forecasting
– Canadian national, provincial, metro

Construction Labor Research Council
– Analysis of labor supply through 2015 and
specific studies
– Quantify needs in the Southeast and
Midwest

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McGraw-Hill Construction Labor
Demand Forecast
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Data’s Role in Assuring Adequate
Supply
Robert M. Gasperow, Executive Director,
CLRC Construction Labor
To Be Covered
Volume
Demographics
Wages
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Government
Volume
Mix Change
SEMTA
BCTD
Other
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SEMTA
Data Entry
http://www.surveystoday.com/sedemand.html
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Demographics
Aging
New Entrants
Composition
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Labor Force Growth Rate
Total
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Male 16-24
90 – 00
1.3%
-0.1%
00 – 10
0.9
-0.2
10 – 20
0.6
-1.0
20 – 30
0.4
1.0
Wages
Relationship to Supply
Relationship to Demand
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Track Record
Past Success
Evaluating Entrants
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Government
BLS Projections
Apprenticeship
Voc Ed
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State Projections
http://www.projectionscentral.com
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McGraw-Hill Construction’s
Construction Labor Demand
Forecast
Harvey Bernstein, F.ASCE
Vice President, Industry Analytics,
Alliances & Strategic Initiatives, McGrawHill Construction
MHC Construction Labor
Demand Forecast

Focuses on creating a demand model for skilled trades in
the construction sector
– Over the intermediate term (5 years)
– Calculates local skilled trade utilization mix

Covers U.S. at national, state and local levels
– The geographic and building type detail in MHC forecasts
means projections of demand for the skilled construction trades by
building type extends down to the local geography

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Links building activity with labor demand in ways that are
consistent with federal data and McGraw-Hill Construction
forecasts and Dodge project data
MHC Construction Labor
Demand Forecast Methodology
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
Uses proprietary Dodge database of construction starts along
with projects in the planning stages

Uses MHC forecasting models to determine sector forecasts
and scale to regional and state level forecasts

Uses U.S. government data to determine skilled trade hours
in different building types

Creation of national, state demand coefficients for state and
local forecasts
MHC Proprietary Project
Information

Dodge Project Network Database:
– The most comprehensive source for
construction starts data for the entire U.S.
– Used by U.S. Department of Census for
Put-in-Place, which feeds GDP calculation
– Time series data monthly back to 1967
– 600,000 active projects
– 60,000 plans and specifications per year
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MHC Proprietary Forecasting
Methodology

Analytic Analysis:
– Forecasting models based on the most
comprehensive historical database available
– Econometric models for 22 major construction
industry sectors at the national and regional
levels
– State and metro area models
– Expertise in determining the percentage of
projects that will ultimately reach start
(within 5 years)
– Expertise in determining the length of time to
start for projects
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construction analysis,
forecasts and trends
Uses Government Data to Create
National Demand Coefficients

Create national “demand coefficients” by drawing on two
major government information sources to create a table of
skilled trade employment per thousand dollars of
construction value by building type
– Department of Commerce’s Economic Census of Construction
Industries: Contributions of each construction industry to building
activity by building type
– Bureau of Labor of Statistics Occupational Employment Surveys
(OES): Occupational employment for the skilled trades by industry
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Creating State & Local
Demand Coefficients
 Adjust
national demand coefficients to fit state and
major metro areas
 Use
OES data & MHC Dodge project data
 MHC
data allows for impact from large projects
 These
calculations are performed to produce trade
hours per $1000 of construction by building type
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Creating Local and State Skilled
Trade Forecasts
 Multiply
the demand coefficients by the
corresponding McGraw-Hill Construction forecast
by building type for a state or local level
 Sum
each skilled trade across building types
 Note:
The construction mix is crucial in forecasting
demand for the trades, since utilization rates vary
significantly by building type
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Labor Demand Forecast
Deliverables
 Forecast
out labor hours for five years
– By building type
– By geography
 National,
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state and local levels
 Information
by project type
 Information
by skilled trade
 Information
on large project impact on labor demand
Electricians in
Albany-Schenectady-Troy, NY
Estimated Electricians Hours 2004-2010
for Selected Building Types
Stores & Shopping Centers
1,400,000
Commercial Warehouses
Offices
1,200,000
1,000,000
800,000

Anticipated spike of labor
demand in office
construction sector in 2007

Driven by several large
office projects in the
planning stages
600,000
400,000
200,000
-
2004
2005
Actual
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2006
2007
Forecast
2008
2009
2010
Electricians in
Albany-Schenectady-Troy, NY
MHC examines large
projects in the planning
queue
 And evaluates whether
projects will go to start
 This allows for clarity on
labor demand forecasts
 More large projects means
the forecast will be more
stable versus dependence
on one very large project

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For More Information:
Contacts:

Harvey Bernstein
harvey_bernstein@mcgraw-hill.com

Ralph Gentile, Economist
ralph_gentile@mcgraw-hill.com
MHC Resource Websites:
 www.construction.com
 www.analyticsstore.construction.com
 www.analytics.construction.com
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Labour Supply and Demand
George Gritziotis, Executive Director
Construction Sector Council, Canada
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