Big Threat Facing Homebuilding Laborers Needed! Single-family construction dropped in June, typically the busiest time of year for homebuilding, and builders are blaming it on a labor shortage. Builders report demand is strong but they are being held back from adding to single-family inventories due to the lack of skilled labor to build new homes.
DAILY REAL ESTATE NEWS | MONDAY, JULY 20, 2015
Unemployment in the construction industry dropped in June to the lowest level since 2001, due to contractors struggle’ in finding qualified workers to meet growing demand, according to an analysis by the Associated General Contractors of America.
“Expanding job opportunities throughout the economy make it increasingly difficult for contractors to find experienced construction workers,” says Ken Simonson, the association’s chief economist. “This scarcity shows up in record workweeks for craft workers and flattening of employment totals despite higher construction spending.”
Indeed, the “nine-trade shortage” – referring to the various skills needed for homebuilding like carpentry and concrete pouring — is now substantially higher than it was at the peak of the 2004-2005 boom. Back then annual starts were averaging around 2 million, compared to current rates of about one million, economist Paul Emrath with the National Association of Home Builders noted in a recent paper.
“The last time builder-reported labor shortages were as widespread as now was just before 2001 during a prolonged period of strong GDP growth with overall unemployment as low as 4 percent,” Emrath notes.
Some builders are splitting their teams to get homes done. For example, builders with McGuinn Homes in Columbia, S.C., say they are dividing its crews and sending them to different lots in trying to frame as many houses as they can.
“We’re being creative in the way that we’re dealing with our trade partners,” says Wade McGuinn, the CEO.
Also, some high schools across the country are starting training programs to add more skilled building crews, but so far, they’ve been slow to bring out new workers, CNBC reports.