USGC Labor Market Study – Current State & Forecast

The dramatic increase in oil and gas production in the United States has driven a significant build-out of infrastructure and capital assets to leverage advantaged feedstock across the country. Since 2012, more than $200 billion of new capital investment has been announced for the United States, including several large-scale ethylene crackers, fertilizer plants, and LNG export terminals.

Most of the announced capital projects are onshore processing plants, including refineries, midstream, and chemical facilities in the U.S. Gulf Coast (USGC) region. It was widely anticipated that the projected demand for construction labor resources in the USGC would far outstrip the local supply, putting inflationary pressures on construction wages and driving productivity down. However, the significant decline in crude oil prices could drive major project delays and cancellations and, thus, ease some of the supply chain pressures.

Will there be a supply gap for construction labor in the USGC? If so, which craft and to what extent?  How will wages respond? Will productivity change?

To answer these questions and others, IPA has created a new subscription service — USGC Labor Market Study – Current State & Forecast — to provide market intelligence to owner companies on construction labor demand and supply and the quantified effect of the market’s response to construction labor wages and productivity in the USGC region. The source of information is the stream of project data that IPA gathers directly from owner project teams in face-to-face interviews. The result is a real-time picture of the status of construction labor in various locations in the USGC.

The bi-annual report, available to IPA clients, subject to the terms and conditions of the existing contract between IPA and the subscribing company, provides subscribers with trend data forecasted five years ahead for:

• Construction Labor Demand — Aggregated projected demand for construction labor resources, provided by craft and major metropolitan area
• Construction Labor Supply — Aggregated projected labor supply, also provided by craft
• Labor Wages & Productivity — Current and forecasted labor all-in wages and productivity provided for region and by major metropolitan area
• Metropolitan Areas—The service provides wage rate and productivity intelligence for Houston-Sugarland-Baytown, Beaumont-Port Arthur, Corpus Christi, New Orleans-Metairie-Kenner, and Gulfport-Biloxi-Pascagoula. The study can be customized to include more regions on request, pending data availability

Originally published in the December 2015 IPA Newsletter (Volume 7,Issue 4)