Who Will Do The Work: Pipeline & Distribution Supply vs. Demand

The Challenge

Uncertainty is the enemy of effective project planning, creating high risk in the marketplace. Yet, as the overall construction industry continues its rebound, numerous industry surveys and construction stakeholders are reporting that an overwhelming majority of energy/utility construction firms and their utility customers are having a hard time finding qualified craft workers. Their challenges and risks are different, but the same:

  • Will workforce availability be sufficient to meet demand?
  • Where do I turn for reliable business and project planning market insight?
  • Will I be able to meet the schedule, stay within budget and delivering expected financial results?

What energy and utility owners and contractors see for their future depends on where they stand, but one question is consistent… Who will do the work? Forward-looking owners and contractors will see opportunity to build competitive advantage through robust market intelligence data born of industry collaboration. Backward looking firms will focus on the challenges; aging workforce, ineffective recruitment, and growing spend in trades and services they cannot offer. There are three power and energy market segments expected to create both challenges and opportunity.

  • Pipeline: The North American transmission market is beset by low oil prices and cancelled projects while distribution faces record demand. Long-term, this market may need 40,000 new field and supervisory entrants.
  • Electric: The T&D market began an upswing in 2012 and will continue with large and routine transmission projects and distribution asset replacement or undergrounding. Long-term, this market may need 50,000 new field and supervisory entrants.
  • Power Generation: The market is threatened and transforming which punishes and rewards industry participants through hard to predict capital construction spending patterns. With an older workforce, retirements will disrupt it while the transformation reduces the need for traditional trades (boilermakers, millwrights, ironworkers, etc.) in favor of less specialized electrical and mechanical trades.

Who will do the work? The North American energy construction market will continue to grow and transform, proving either a hobbling constraint or competitive advantage. Forward looking owners and contractors will see an opportunity to build competitive advantage through collaboration and control a scarce resource: competent and capable labor, supervisory and project management staff that can productively, safely and in compliance build utility capital assets. There is an opportunity to thrash your competition over the coming decade; be the firm that “sees the opportunity in every difficulty.”

The Solution

The CLMA® exists to help construction stakeholders effectively understand and mitigate project risk and accomplishes this goal for owners, contractors and unions around the United States through five primary cutting-edge tools and services.

  1. The Construction Labor Market Analyzer® – sophisticated tools like the Project Labor Forecaster® (PLF®) enable you to input and manage and entire project portfolio and understand your project risk relative to your internal capacity and external competition. Supply tools enable you to easily input labor supply and track labor mobility and retirement attrition. The Market Intelligence portal and database helps you visualize high-value market supply/demand information to dynamically understand labor imbalances.
  2. The CLMA® 20/20 Foresight Report – an online tool updated continuously by our highly skilled analysts and economists to help you understand the economics of construction labor market risk providing dynamic supply/demand shortage rankings (Base-to-Peak charts) by state and region for dozens of craft disciplines
  3. Wage Escalation Forecasting – Visualize and manage current hourly wages and per diems (our data and/or yours) for key skilled craft positions by state and zip code and/or let us provide projected wage and per diem increases or decreases over a 3-5 year horizon
  4. Customized Labor Market Analysis – analysis and data the way you want and need it to meet your particular business needs. Options include customized reports and web application solutions
  5. Personalized Service & Assistance – We commit to excellent value and service and provide options where we do all the work for you so that you can focus your efforts on business results.

These tools and more enable confident understanding of the construction skilled labor market in the context of the overall U.S. and regional economies and enable you to confidently address the following labor challenges:

  • Which crafts are needed? When? Where?
  • How many craft workers are available? Where are they?
  • Is available supply sufficient to meet demand?
  • Project labor risk planning and mitigation
  • Project labor cost contingency management
  • Project planning and scheduling
  • Modularization and prefabrication decision-making

To learn, more contact Adam Young (ayoung@myCLMA.com).

DOWNLOAD our January 2016 article with more detail about this labor challenge.


DOWNLOAD a summary PDF of this information.