Construction staffing increases on gas drilling boom

08.08.2012


Construction staffing increases on gas drilling boom
Construction staffing increases on gas drilling boom

The Marcellus Shale oil and gas boom occurring in Charleston, West Virginia, has been a savior for the city's construction sector, which was slumping until new infrastructure needs led to higher demand.

According to the Charleston Gazette, one Charleston construction company said it is directly benefiting from the number of new oil and gas projects appearing in the region.

"Thank God for that," said John Strickland, president of Maynard C. Smith Construction, speaking on the activity in the natural gas reserves located throughout West Virginia. The deposits extend well into Pennsylvania, Ohio, New York and other eastern states, suggesting room for further growth.

"It has put our pipeline contractors to work, our road building contractors to work," he said. "That huge private sector has saved our cookies."

Construction activity has been struggling around the country, with construction staffing falling in nearly half of the 337 metropolitan areas around the U.S. between June 2011 and July 2012. But in 127 of those metropolitan areas - including Charleston - construction employment has surged, thanks in part to Marcellus Shale projects.

According to a recent report released by the Associated General Contractors of America (AGCA), West Virginia's construction employment jumped from 34,100 in June 2011 to 36,700 in June 2012. In the three years leading up to the energy boom in 2012, construction employment throughout the state had fallen 19 percent.

Mike Clowser, executive director of the Contractors Association of West Virginia, said that without the Marcellus Shale projects, the construction industry would have never picked up.

"A lot of our members are working in the Marcellus Shale industry. Water and sewer contractors are putting in lines, highway contractors are putting in roads, aggregate suppliers are supplying stone to these projects," he said. "We are seeing a pretty good market for our membership that are now working in the oil and gas industry that were not involved in this process five years ago. As such, our members have been able to stay pretty busy."

The natural gas industry is also improving the construction environment in nearby states, including Ohio and Pennsylvania. Mark Grigsby, president of Pray Construction, said the shale gas boom has increased the need for building support structures, which has become a major source of revenue for the company.

"At least 30 percent of our work volume is tied to the natural gas industry," Grigsby said. "That industry has continued to develop the last several years and we have followed them in the marketplace."

The AGCA report noted that construction spending increased the most in more than two years in June 2012, with five of the 11 private nonresidential construction sectors increasing their gains by double digit percentage points. Construction projects revolving around power and energy, which include oil and gas projects, saw the largest increase in spending at 26.5 percent.

While the oil and gas sector is indirectly creating construction jobs, it also also helping the economy and jobs climate overall. According to a recent report from IHS Global Insight, shale gas production supported more than 600,000 jobs in 2010, and the number of people employed in the shale gas industry is expected to grow to 1 million by 2035.

According to the latest data from the Bureau of Labor Statistics, oil and gas extraction employment increased in July to its highest level in 24 years, and rose 11.6 percent from July 2011.