General Business

Rebounding Economy Creating Work for the Construction Trades

Infrastructure investment continues, but high interest rates, inflation, materials costs, and environmental concerns continue to put a drag on some projects.

Infrastructure projects, especially utility upgrades and transportation improvements, are creating jobs for construction trade union members as New Jersey tries to fix its aging utility systems and highways and develop new energy sources.

About 679,000 union members (all types of unions excluding non-union members represented by unions) were on the job in 2024. They accounted for 16.1% of total employed wage and salary workers in New Jersey, according to the US Bureau of Labor Statistics. While that’s an increase of 60,000 workers from 2022, it’s just 37,000 more workers than pre-Covid 2019 and well below the peak of 721,000 union members employed in 2009. 

“I don’t know that the pandemic necessarily is responsible [now], but I think that the private markets are constricting a little and higher interest rates have been persisting for a while,” notes Greg Lalavee, president of Local 825/ELEC Operating Engineers. “The public infrastructure and utilities markets are still robust. Gas companies continue to change out old iron pipes so that they leak less. That’s an ongoing process by everyone in that business, whether it’s South Jersey Industries (SJI), Elizabethtown Gas (an SJI subsidiary), or New Jersey Resources.” 

Infrastructure Investment

The Infrastructure Investment and Jobs Act of 2021 and the Inflation Reduction Act of 2022 have helped focus investment on badly needed water and sewerage system improvements, Lalavee notes, adding that Local 825/ELEC operating engineers are starting to see more work on pump station upgrades and wet line improvements. 

IBEW Local 102 President Bernie Corrigan comments, “With more than $7 billion of investment dedicated to much needed infrastructure upgrades over the next two years, our friends in the utility sector are certainly at the front of the pack.”

New Jersey Building & Construction Trades Council President William T. Mullen notes that the Infrastructure Investment and Jobs Act and the American Rescue Plan Act (ARPA) have generated “significant capital investment increases in transportation and broadband infrastructure. The most well-known are the Gateway tunnel and related Portal Bridge projects.”

Lalavee’s union has about 90 members working on the Portal Bridge project, which is about 35% complete. “Given the other trades that are working on it and the management staff, it gives you an idea what kind of major infrastructure project this is,” he says. The other pieces of the Northeast Corridor rehabilitation in the $18.4 billion Gateway Project include the new train tunnel from New Jersey into Manhattan, which would generate significant work for the trades. “I shouldn’t be saying this, but we might be drilling a tunnel by the end of 2024,” Lalavee says.

Mullen gives some credit to the New Jersey Board of Public Utilities (NJBPU) for an uptick in infrastructure investment by the gas, electric, and water utilities. Significant capital is also going into the offshore wind industry. “With the state’s [recently reauthorized] Transportation Trust Fund, we expect a continued shot of adrenaline to the state’s transportation infrastructure over the next five years,” he says.

Costs Remain High

Building supplies, in many cases, have come down over the past year. The problem, according to Corrigan, “is the large gap to close when you look at the massive increases over 2020 and 2021. So, yes, supplies are still costly relative to pre-pandemic pricing and certainly have an impact on any job decision.”

Things became very difficult when the war in Ukraine disrupted steel supplies for a while, Lalavee says. 

“Yes, they (material prices) are still expensive. There is general acceptance that they never are going to get back to pre-pandemic levels,” he says.

The impact of a pandemic-driven change in office culture, combined with high interest rates and inflation, have devastated commercial real estate, particularly office construction, says Mullen, adding that the scenario has also detered developers and made commercial banks selective in making commercial real estate loans. 

“We are not back to pre-pandemic levels, but the supply chain issue is better; and the New Jersey Economic Development Authority has begun issuing Aspire Tax Credits for commercial building gap financing,” Mullen says. 

Regulations and Residents’ Resistance

Eventually, environmental justice regulations are going to hurt. 

New Jersey’s environmental justice law requires the state’s Department of Environmental Protection (DEP) to evaluate environmental and public health impacts, especially on overburdened communities, when reviewing development applications. The state’s environmental justice law, the first in the country, has given some momentum to the anti-warehouse movement in residential areas. 

Meanwhile, Lalavee says some of the current flooding rules seem overbearing. “I can acknowledge people who say there’s a report that barrier islands are going to be underwater in 30 years,” he says. “However, there was a report 40 years ago saying that. I’m not discounting more severe storms. I’m not some kind of climate denier, but it’s easy to be skeptical when you read the same report 40 years ago.”

Opposition to warehouses also continues to gain momentum, with more pushback from municipalities that don’t want warehouses due to the truck traffic that comes with them. Lalavee, who lives in Bridgewater, notes that “people went crazy” in neighboring Hillsborough and in Sparta when warehouse developments were proposed.

“It’s an indiscriminate part of partisan government. If you’re in government and you approve them, they throw you out,” he says. “At the end of the day, we’re turning into an economy that’s heavily reliant on logistics. We have a port that anchors most of the commerce in this state. Warehouses may not look the prettiest, I get that. However, when you start to unpeel the onion in terms of taxes and jobs, there has to be some kind of balance there.”

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