IV SHEET METAL WORK IN THE CONSTRUCTION INDUSTRY

Introduction

Several nonsolar energy related developments in the construction industry will probably have significant impacts on the level of sheet metal worker employment over the next decade. The discussion focuses on significant changes in the technologies of heating, air conditioning, and ventilation of buildings and plants that are expected to occur as a result of energy economics and changes in the HVAC state of the art. This analysis demonstrates that these technological developments on balance will have a positive bearing on the level of sheet metal worker employment, but that the various sectors of the construction industry will be affected differently.

Because construction statistics are available on the basis of types of building, the analysis is structured on similar lines rather than on the changing technologies per se, since this enables impacts on employment to be determined more readily.

According to data provided by the Union, employment in September 1974 was distributed as follows:

Workers in the building trades thus account for 62 percent of total Union membership (excluding "Other"), compared with 33 percent employed in production work, and 5 percent employed in railroad work. Accordingly, the analysis, which related to heating, air conditioning, and ventilation of buildings and plants, has a direct bearing on 62 percent of the current Union membership. Energy related phenomena (exclusive of solar) do not appear to bear directly on the volume of sheet metal work that can be expected in factory production and railroad construction/repair activities.

Status of Sheet Metal Work

To analyze the effect of changing technology on sheet metal worker employment, it is necessary first to determine the level of construction, both historical and forecast. Also, on the basis of the proportion of construction accounted for by HVAC, and the proportion of HVAC accounted for by sheet metal work, it is then possible to derive a base level from which change in sheet metal work can be estimated.

Table 10 shows the volume of construction by U.S. Census building categories at five-year intervals between 1960 and 1985. Because the figures are in constant 1975 dollars, the results of the analysis are free from the effects of inflation. Thus, likely impacts on sheet metal worker earnings resulting from a given technological development, are expressed in real changes in earnings.

The most significant aspect of Table 10 is the absolute importance of residential construction throughout the past 15 years, and this is projected to continue in the decade ahead; residential construction represents 48 percent of all construction in 1975 and is estimated to be 45 percent of total construction in 1985. This is considered to be too large a segment of the market for the Union to neglect.

Table 11 is a profile of the distribution of sheet metal worker earnings (before income taxes) by type of building for 1975, which is also the base year for subsequent analyses. The table indicates how the level of sheet metal worker earnings by type of construction were calculated. Total sheet metal labor earnings (Union and nonunion) in 1975 are estimated at $1.822 billion. This compares with total wage earnings

of $587 million in the production sector.

The source for total earnings for 1975 from the production of sheet metal is the 1972 Census of Manufactures, MC 72 (P)-34C-4. This report gives the total earnings for sheet metal workers in 1967 and 1972 engaged in the production of sheet metal work for buildings and of sheet metal stovepipe, light tanks, and other products included in the Standard Industrial Classification (SIC) Code 3144. To arrive at the 1975 estimate of $587 million, the 1972 estimates were extrapolated on the basis of historical growth rates and the result was converted to 1975 dollars. The table also indicates that in excess of 43 percent of sheet metal labor dollars in the construction industry are accounted for by the residential sector, an area where the Union is not strongly represented. Certain exceptions, as in Detroit, indicate that lack of organizational success in the residential area is not due to the inherent nature of residential construction but more likely reflects Union priorities either implicit or explicit.

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Unless otherwise indicated, the source for these numbers is Predicast, Issue #58, January, 1975. The historical data in the Predicast tables are from the U.S. Bureau of the Census, Construction Reports, Series C30. Series C30 data are not entirely consistent with the data found in the U.S. Census of Construction Industries, for reasons noted on page 2 of the "U.S. Summary" of the 1972 Census of Construction Industries, CC72 (P)-28. In particular, we feel that the Predicast numbers may be low and that therefore there may be a conservative bias to our subsequent analysis.

Source: SRI.

The breakdown into single and multiunit structures over time is consistent with the U.S. Industrial Outlook, 1974, With Projections to 1980, U.S. Department of Commerce.

This assumed 45%:55% ratio of expenditures on office buildings to expenditures on commercial complexes is consistent with data for 1967-1972.

From the Statistical Abstracts of the United States, 1974, U.S. Department of Commerce. Estimates beyond 1970 assume a 4.2% average annual growth rate for power plant construction.

While the Predicast forecasts detail expenditures on public educational construction, expenditures on private schools are not detailed. Presumably, these latter expenditures are part of the category entitled "Other.

SRI assumed the level of construction activity in this category to total 40% of the level of activity in the commercial sector. This is consistent with data appearing in the "U.S. Summary" of the 1972 Census of Construction Industries, CC72 (P)-28 (page 4).

Table 11

SHEET METAL WORKER EARNINGS BY TYPE OF BUILDING, 1975

Other

Total

Source:

SRI

Effect of Technological Developments on Sheet Metal
Worker Employment and Earnings

Several technological developments in the heating, air conditioning and ventilating industry are expected to have an impact on sheet metal work in the coming decade. Since the discussion is organized around four different types of buildings, it is possible to relate the technological. changes to construction and to sheet metal employment. The building types

are:

• Core-type buildings--these are edifices with extensive zoned
This category includes most office buildings,

interior space.

banks, hospitals, and institutional buildings.

· Commercial complexes--this category includes shopping centers,
stores, and schools. (Large department stores are included
in the first category above.) The distinguishing character-
istics of buildings in this category are either a small
portion of interior space (i.e. most rooms will have windows
to the outside, as in schools), or else--if the interior
space is large--it will be unzoned (i.e. free from partitions,
as in discount stores).

Construction of buildings in the core-type category is expected to grow more rapidly than in any other sector of the construction industry, except for power plants and multiunit residential as indicated in Table 11. The growth rate at 3.5 to 3.8 percent annually is approximately double that of total construction industry.

Until 1970, at least 90 percent of all HVAC installations in coretype buildings has been one of five traditional types of systems. The se are defined briefly below, although there are numerous variations and modifications to these systems.

Induction systems--in an induction system, two different kinds
of air are used for ventilation, heating, and cooling. First,
ducted air is delivered to the room from the central plant.
The other kind of air is "induced air", that is, room air
that is cooled (heated) locally by means of a water cooling
(heating) coil, or a similar device.