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Rebuilding Florida after Ian may be slowed by labor shortage

The construction industry, already at relatively low unemployment, may be challenged to meet the demands of rebuilding Florida and other areas hurt by Hurricane Ian.

In one of the tightest labor markets in recent U.S. history, rebuilding Florida after Hurricane Ian will likely take thousands of workers -- especially in construction.

But hiring workers -- the ones who will be rebuilding months and years after the storm's initial cleanup -- could be a challenge because of low unemployment in construction and in general, especially in Florida.

The storm's  economic costs are unknown but are estimated to be high. For comparison, Hurricane Sandy, which made landfall in 2012,  cost more than in inflation-adjusted dollars, according to National Oceanic and Atmospheric Administration data.

In 2012, the construction industry was starting to recover from a five-year downturn, and there were more workers available to rebuild compared with today, said Ken Simonson, chief economist at The Associated General Contractors of America, an industry group.

Just before Sandy hit, 900,000 construction workers were identified in government data as actively looking for work. In contrast, fewer than half as many construction workers, 401,000, August. According to Simonson, the unemployment rate in August was 3.9%; in August 2012, it was 11.3%.

There are far fewer experienced workers available to meet current demand, let alone a storm surge in demand.
Ken SimonsonChief economist, The Associated General Contractors of America

"In other words, there are far fewer experienced workers available to meet current demand, let alone a storm surge in demand," Simonson said.

Hurricane Sandy ranks as the fourth most-costly . Hurricane Katrina's $186 billion ranks as the most expensive.

Simonson said he is nonetheless optimistic that the construction industry will meet Florida's needs.

"The construction industry has an admirable record of responding promptly and effectively to natural disasters," he said. "I am confident that many companies and workers will respond to the most urgent needs in Florida and wherever else Ian causes catastrophic damage."

Factors affecting construction include the high demand for workers as a result of the $1.2 trillion infrastructure bill approved last year. Colleges are ramping up programs to train more skilled workers, but even hiring unskilled workers could be a challenge. Florida's overall unemployment rate below the national average of 3.7%

Buildings damaged by Hurricane Ian this week. Rebuilding may be slowed by low unemployment rates.
Damaged buildings are seen Thursday after Hurricane Ian passed through the area in Fort Myers Beach, Fla. Experts say rebuilding may be hampered by low unemployment rates in the construction field.

The effort to rebuild Florida's hurricane damaged areas will go through a series of steps, said Peter Dyga, president and CEO of the Associated Builders and Contractors (ABC) of Florida's East Coast chapter. It will begin with initial debris clearing and utility restoration work.

Dyga said he sees the utility response as a cooperation model, with crews coming into the state from around the country under mutual assistance agreements. He added that he wishes there was something similar to cooperative agreements for rebuilding after a storm, but there isn't.

"The labor problem is so acute already," he said. "To pile this on top of it, it's just difficult to see any kind of a short-term solution."

Government can play a role by loosening some rules, such as extending building permits on a job so that a contractor can move some workers to a disaster area and not worry about losing a permit, Dyga said.

The need for labor may renew pressure in Washington to speed up work permits for asylum seekers.

Earlier this year, U.S. Sens. Susan Collins (R-Maine) and Kyrsten Sinema (D-Ariz.), introduced legislation that would shorten the waiting period to 30 days after migrants apply for asylum, speeding up the process by months.

Patrick Thibodeau covers HCM and ERP technologies for TechTarget Editorial. He's worked for more than two decades as an enterprise IT reporter.

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