BY ANDREA HOLECEK, Times of Northwest Indiana
holecek@nwitimes.com
The problems in the nation's credit markets are affecting the level of Northwest Indiana's commercial and industrial construction activity and the construction industry jobs it provides.
.During the past two years, Northwest Indiana has been in the midst of a construction boom not seen since the mid-1960s. Steel prices were bringing record highs, road projects were underway, medical centers were being built and the area's entire business climate was optimistic.
"A month ago, we were very upbeat, and now everyone's holding their breath," said Dewey Pearman, chief executive officer of the Construction Advancement Foundation. "Even six months ago, we were a little concerned about not being able to man all the anticipated work. Now we're concerned the work might not be there."
The concern about an adequate labor pool was based on the aging demographics of the region's work force, he said.
"The exodus would probably hit construction several years before other industries," Pearman said. "We tend to see people retire earlier because it's physically demanding work, and by the time they're in 50 and 60, they're a little worn out.
"Plus, in this area, the vast majority are union workers, and that sector funds very good retirement programs for the workers. By the time they're in their late 50s or early 60s, they're in a financial situation to take early retirement."
The current economic crisis is affecting both factors, the amount of work and people's ability to retire.
"We're starting to see early signs of a slowdown," Pearman said. "Some of the mills are starting to scale back on maintenance work: roofing, replacing sheeting, maintaining production equipment. There's normally a lot in Northwest Indiana. When orders fall off and prices fall, companies scale back and that affects hundreds of workers."
During the summer, the building trades brought hundreds of people into their three-to-five-year apprenticeship programs anticipating a continuing strong area economy. Current economic conditions could affect completion of apprenticeships, said Mike Summers, past president of the 15,000-member Northwest Indiana Building and Construction Trades Council and business manager for Iron Workers Local 395.
On Sept. 29, Summers said he and others were sitting in his office speculating where they were going to get enough people to do all the work the area's steel mills had planned. Four days later, everything changed.
"ArcelorMittal called us to a meeting last Friday at noon where they told us they were going to move all building trade people out of their two Indiana Harbor mills," Summer said. "Within two weeks, 1,000 people won't have work because there are no orders for steel, so they're cutting production 25 percent."
The company will use its own hourly employees to do maintenance work the trade union workers normally do, he said.
Summers excepts to have a similar situation at U.S. Steel Corp.'s area mills.
"Yesterday, they (U.S. Steel) told all area managers they are going to stop any job not necessary to complete and not to issue purchase orders for anything in the steel shops," he said.
ArcelorMittal couldn't be reached for comment Friday. U.S. Steel spokesman John Armstrong said "it's not our policy to provide updates on our operations beyond our discussions in our quarterly earnings release and on our earnings call."
One of the saving graces for the area's construction trade unions is the BP project, said both Pearman and Summers.
"Even if others are put off, we still anticipate good numbers from that project," Pearman said
BP Whiting Refinery's $3.8 billion Canadian crude oil project will add 2,000 trade jobs by mid summer 2009 when it in full swing, Summers said.
The 2,000 workers are in addition to the about 1,000 contractors normally working at the refinery as a maintenance force, he said.