Construction Wages Drop But Development Is Still In The Works

Written by Posted On Thursday, 24 January 2008 16:00

The downturn in the real estate market is leaving some people searching for work, but not all construction-related workers are completely leaving the industry, despite a 15 percent drop in wages.

"There are a lot of unemployed people in the homebuilding industry and that has affected the wage; … people are willing to work for less," says Angel Ahumada, CEO for Integrity Recruiting.

It's no surprise that the Compensation Outlook 2008 report by Integrity Recruiting expects declines for people in the single-family residential construction industry.

"If you're looking at the construction industries, the private development as it relates to residential or any type of development—where companies are out building new retail centers or tying up land (basically picking up new projects from scratch) is at a stand- still," says Ahumada.

According to the international recruiting firm, which specializes in construction-related industries, the news isn't all bad; construction companies are still hiring.

"Government spending on construction is up in many areas, including California, and these companies are actively pursuing that work as residential construction has come to a halt," says Ahumada.

The report for 2008 projects a rise in compensation for professionals working on public works construction projects, multi-family housing, and tourism-related industries. The information is based on a database of more than 40,000 professionals and hundreds of completed executive searches that Integrity conducts each year in the U.S. and internationally.

"Where we're seeing a lot of the demand is in heavy civil construction as it relates to roads, bridges -- any type of roadway renovation. There is a huge demand for paving and grading experience," says Ahumada.

He says a lot of the companies that were heavily working in residential niche markets are now scrambling for public works projects such as libraries, schools, and road construction.

"The demand has shifted. For the past four or five years residential has been really, really hot and now that industry is just flat," says Ahumada.

Ahumada says there will be a lot of competition due to competing foreclosures and a lot of inventory accumulated from builders. It could make it the perfect time for buyers to seize the properties they've had their eyes on.

Areas still growing in real estate development over the next few years are likely to be commercial projects that will help balance the saturated residential construction.

General contractors are still pretty busy. "The office building stuff has definitely slowed down -- not a lot of new projects are slated for these next couple of years. But if it's retail big-box-type construction -- that stuff is still pretty busy because they're trying to catch up with all the housing that's been built in the past six years," says Ahumada.

He says hospital construction is also in demand because of our aging baby boomers. Schools are also keeping industry experts busy. Those in demand most are workers specializing in architecture, engineering, and construction management.

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Phoebe Chongchua

Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website:

Phoebe's articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today's Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe's writing is also featured in Donald Trump's book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success.

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