The Sacramento area has been experiencing a surge in housing demands, making many construction companies that have laid people off scramble for skilled laborers. This is a concern for the surety underwriters because having more unskilled labor on the job sites could pose a greater risk to errors on the job. The labor shortage is being attributed to the downturn in the construction industry over the past few years, the Sacramento Business Journal estimates that 750,000 construction workers have left the industry. Some experts are predicting that the current spike in construction demands will be short lived. Industry professionals are hoping that is not the case but if the demand continues then it will be hard to find the labor supply to meet those demands.
Unskilled laborers on the project could lead to increased claims on bonds and workers comp insurance since they will not be as experienced as their predecessors. For example, a less skilled roofer may install a leaky roof which could result in a performance bond claim from the owner. All owners and general contractors need to be sure that they reference laborers and sub-contractors to ensure that they have a record of high quality workmanship. For the fullarticle from the Sacramento Business Journal, please visit their site.