BusinessReport.com

Twenty-five years ago, there was very little building going on in the Capital Region. Interest rates were high, drying up investment for new projects, and there wasn’t much work for the area’s building contractors and laborers.

Today’s market is almost the exact opposite of 1982. Interest rates are relatively low, optimism is high, new projects are going up around every corner and there are barely enough workers to go around.

“I’ve never seen such a construction boom and industrial boom at the same time,” says Andy Dupuy, an executive vice president of The Shaw Group. “Baton Rouge is probably unique in that regard.”

Dupuy says the supply of skilled workers far exceeded demand in the early 1980s. Today, the boom in residential, commercial, industrial and infrastructure construction has led to a demand for workers that far outstrips supply, driving wages up more than 30% over the last two years.

He says the devastating hurricanes of 2005 had only a short-term effect on the Baton Rouge market, leading to a residential construction spike that has since cooled a bit and a series of industrial repairs that have mostly been finished.

Roland Toups, CEO of Turner Industries Group, says virtually nothing was being built in Baton Rouge in the early 1980s, when the tight money supply caused by high interest rates “shut this area down.”

But Toups says the workload began to pick up in the early 1990s, and that trend continues today with a building boom in the chemical and energy industries, along with the first major expansions of refinery capacity in three decades.

Billy Ward founded Port Allen-based Champion Builders in 1983. He’s done some commercial and industrial work over the years, but he focuses on residential work these days and is the president of the Capital Region Builders Association.

The early 1980s were a tough time to start a construction company, but it felt right because Ward is a carpenter by trade.

“It’s what I knew how to do,” he says. “Twenty-five years ago, the typical builder did most of the work himself.”

The modern builder is more of a businessperson. Ward sees himself as the “conductor of the orchestra,” leading a team of subcontractors, which he prefers to call “trade associates.”

In those early days, Ward didn’t need workers’ compensation insurance or much knowledge about general liability either; a homebuilder didn’t necessarily even need a license.

While Ward says today’s numerous licensing and continuing education requirements have created a more professional industry, the tighter governmental regulations and new fees have driven up consumer costs and placed a heavy burden on the industry.

As the economy picked up, the housing market started slowly coming back in the late 1980s and showed solid growth through the 1990s. While the post-Katrina spike in demand has leveled off, Baton Rouge has so far been immune to the price crash so many other markets experienced.

Louisiana AFL-CIO president Louis Reine says the early 1980s’ economy was especially tough on the building trades. By contrast, today, he says, “Everywhere you look there’s building going on.”

The relationship between labor and business has greatly improved from 25 years ago. Unions have developed a more businesslike attitude. They’re in the business of delivering skilled workers, a service that becomes more important as the labor market gets tighter.

“In my opinion, we have had a shortage of well-trained workers for a long time,” Reine says.

Unions have also begun to help management deal with the skyrocketing cost of health care. In the Baton Rouge area, building trade unions generally offer health insurance to their members; the costs of the plan are shared between the company and the union.

“There’s been a greater understanding from both sides of our mutual interests,” he says. “In the last couple years, we’ve been able to find more common ground.”