In 2006, Wisconsin saw the number of construction jobs peak at 129,700 statewide. In the second quarter of 2011, that number reached a low of 88,300. In the past five and a half years, one of every three construction workers has lost his or her job.
According to the Wisconsin Department of Revenue Economic Outlook, the forecast for 2012 shows an additional decline of 5.1 percent in the first quarter. Two more years of job loss is expected, followed by steady growth in 2013 and even stronger growth into 2014.

“I don’t want to sound pessimistic, but I haven’t seen anything that implies there will be a significant recovery in 2012,” says Mike Fabishak, CEO of Associated General Contractors of Greater Milwaukee. “It may be a wash.”

The housing dilemma
Housing, he explains, is still problematic. Consumer anxiety and financing hurdles have put this sector of construction on hold for many industry professionals. With the expiration of the federal homebuyers’ tax credit in mid-2010, the housing market is struggling.According to the Wisconsin Realtors Association, existing home sales fell 7 percent in 2010 and 17 percent in the first half of 2011. Homeowners who are unable to sell their existing homes directly impact the new home building market, and, in turn, construction jobs.
 
The Wisconsin Builders Association’s (WBA) September 2011 report explains that for every 1,000 homes built, 2,043 full-time permanent jobs are supported, as is $209.5 million in income for Wisconsin residents.

In 2005, 73,227 jobs were supported by home construction, and $7.5 billion in income; in 2010, 12,985 jobs and $1.3 billion in income. In total, 60,242 jobs and $6.2 billion in wages have been lost in Wisconsin due to the housing industry decline.

Also, fewer building permits are being issued. The Department of Revenue predicts that the recovery from a steady decline that began in 2003 will start to occur in 2012, with an increase of 9.3 percent. In 2011, it increased 8.4 percent, after hitting bottom in the first quarter of 2009. In 2003, Wisconsin residents bought 42,700 permits; that number dropped to 8,700 in 2009.

The WBA report states that 1,250 new lots had been platted in the state for new home construction, with the total for 2011 at 1,356. This is compared to the 2005 number of 21,366. Lot production is up approximately 44 percent from the year prior, but decreased 91 percent since the high in 2005.

“There’s not a lot of spending going on in the private sector right now,” says Fabishak. “The consumer, 65 percent of the economy, is really the king here, and the problem is that the consumer is sitting on the sidelines.”

Fabishak acknowledges that stricter lending guidelines, decreased property values and nervousness in the market are major players in this trend.

On the bright side
However, there are a few bright spots in the dismal construction outlook.

Construction businesses are benefiting from the higher rates of remodeling and space reorganization to fit downsized staffs or ease the financial strain of a company’s operating costs. Even others are growing.

“There have been some opportunities for manufacturers to do some expansion, and they’ve taken advantage of it,” says Fabishak.

In the highway sector, jobs are steady. Dan Zignego Sr. of Waukesha’s Zignego Co. Inc. says that even though the previous federal highway bill expired two years ago, extensions have kept the highway construction industry above water.

“It hurts Wisconsin, because they can’t do any long-range planning,” he says. “They’re not positive how much money will be coming in from the federal government, but it appears funding is available at levels equal to last year.”

He explains that the roadwork is reaching the pre-stimulus numbers, which is good. Until Congress can agree on a new bill, however, things will be in limbo but stable, with enough highway work to go around.

Another sector seeing continued success is multifamily construction. Though the rate of foreclosures is declining with Wisconsin seeing just more than 1 percent of the national total in 2011, many families have moved from single-family homes to multifamily units and young professionals are staying out of the market for now.

Fabishak believes that higher education opportunities for contractors also are a place of improvement for the market as many efforts are supported through national funding, not the private sector. President Obama’s new proposal to build infrastructure could also contribute to an increase for commercial construction jobs, which currently is operating at 25 to 30 percent unemployment.

He says professionals in the private arena are looking more closely at the ways they do business. “The prudent ones who have put a few nuts away for the winter are really evaluating what they’re doing, how they’re doing it, and trying to adapt to these changing conditions,” he says. “It’s a challenging time right now for our industry.”

Even with challenges, he says that the professionals representing Wisconsin’s construction community are adaptable, savvy and looking forward to continued growth.

“I think a lot of people would just be satisfied with some stability and the market not eroding further,” explains Fabishak. “It would give some predictability.”

By Jen Bradley

Jen Bradley is a freelance writer living in East Troy.

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