WV construction is building momentum

CHARLESTON, W.Va. — West Virginia celebrated nation-leading job growth in the construction industry this week, and close observers believe even better days are ahead.

“It is legitimate improvement. It really is legitimate improvement,” said Brian Lego, economic forecaster at West Virginia University’s Bureau of Business and Economic Research.

Gov. Jim Justice touted West Virginia’s growth in construction activity during an appearance at the West Virginia Construction and Design Expo.

West Virginia added the highest percentage of new construction jobs during the past year at 14.4 percent, or 4,300 jobs.

By percentage, West Virginia was just ahead of California (9.8 percent and 75,500 jobs), Nevada (9.7 percent and 7,800 jobs) and New Mexico (9.7 percent and 4,300 jobs).

The statistics the governor cited came by way of the Associated General Contractors of America through the U.S. Department of Labor.

As Justice noted, the same association said West Virginia lost the most construction jobs in the country over the course of 2015. That year, West Virginia shed 2,400 jobs, or minus 7.2 percent.

Brian Lego

“What I want to draw attention to is where things where. They were pretty bad for the state’s construction sector,” Lego said. “It was coming off of a low point. As we know, the state had endured a pretty significant recession.

“It’s not to minimize the improvement. It has been a fairly notable improvement. A 7 percent year-over-year increase is nothing to dismiss. We’re a little bit ahead of schedule.”

There are several reasons to believe more growth is ahead, pointed out leaders in West Virginia’s construction industry.

Steve White

“I think what we’re seeing in ’17 was just getting back to where we were,” said Steve White, executive director of the West Virginia Affiliated Construction Trades Foundation. “There’s, I think, significant growth to come.

“The misperception could be that the road bond and the gas industry stuff is fueling ’17, and I think no that’s what’s going to fuel ’18. 2018 looks to be a banner year. That’s where I think West Virginia will really gain ground.”

One factor is the road bond package pushed by Governor Justice and approved last fall by voters.  The Department of Highways plans to go to the bond market in May for the first $800 million. The bulk of the uptick in highways work would begin after that.

Another is the major natural gas pipelines that seem to be on track for construction over the better part of this year. The Atlantic Coast Pipeline and the Mountain Valley Pipeline each are planned to stretch hundreds of miles, transporting West Virginia natural gas to eastern markets.

“I think the big growth is still to come. Give the governor credit for the big road package,” White said. “But those projects, the first significant wave, the Garvey bonds that were sold and the bids went out in the fall. Most of that work will get started soon. The road bond stuff hasn’t hit yet.”

Much of the recent growth has been related to the natural gas industry, White said.

“Probably most of that can be attributed to the gas fields. The routine pipelines, the processing facilities,” he said.

But some construction sectors have still lagged behind.

“Other construction — offices buildings, restaurants — is still in the tank,” White said. “So the commercial side is still somewhat depressed, particularly in the southern part of the state.”

Brian Hoylman

The West Virginia Chapter of Associated Builders and Contractors, a trade association representing the non-union construction industry, has been keeping an eye on the jobs numbers and seeing the upward trend.

“We weren’t surprised. We’ve been tracking that number for the last year and a half. We’ve noticed the trending up,” said Brian Hoylman, president of the West Virginia chapter. “To go from worst in the country to first, we were certainly pleased.”

Hoylman agreed that the growth has resulted from several factors, including natural gas. He said much of the activity has been in the north central part of the state, as well as the Eastern Panhandle.

“We think there’s been a little more money on the street with state and federal projects. It’s been a mix of everything, across the board. It’s a really good sign,” he said.

“All that stuff combined with potential for the investment from China and all the indirect investment that will create is really positive.”

Hoylman believes the improving picture for construction likely means better things to come for the rest of West Virginia’s economy.

West Virginia’s overall employment growth from January 2017 to January 2018 was .5 percent.

The national average was 1.5 percent.

That meant West Virginia ranked 40th.

Hoylman says improved performance in the construction industry reflects greater opportunities in the West Virginia economy.

“If construction is doing well then the economy is doing well,” he said.

“To see that rising in West Virginia alongside other economic indicators, it’s a very stark and obvious sort of indicator that the economy is turning around and headed in the right direction.”

Lego, the economist at WVU, agreed that seeing broader improvement in the construction industry — particularly in residential and retail — would be a greater indicator that West Virginia’s economy as a whole is improving.

“It’s more if it’s a broader improvement in the construction sector where it would be more of a barometer of the overall economy’s health,” he said. “The parts that would be more reflective would be growing population, incomes growing, would be within the residential sector. We’re seeing modest improvements there.

“That’s being driven by the typical places like the Eastern Panhandle. The other parts of West Virginia — you don’t’ need a  lot of new construction because you have vacant homes or turnover, people buying existing homes.”


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