Feast or Famine; Home Builders now Face Labor Shortages

by devteam March 22nd, 2013 | Share

Residential homernbuilders are reporting that a lack of available labor is hampering new homernconstruction the National Association of Home Builders (NAHB) said today.  The worker shortage is evident in most of therntrades.</p

Homebuildersrnresponded to a survey by NAHB with more than half reporting they hadrnencountered labor shortages over the last six months that have caused them tornpay higher wages or subcontractor bids and consequently raise the price of completedrnhouses.  Forty-six percent said they hadrnexperienced delays in completing projects, 15 percent had to turn down work,rnand 9 percent lost or cancelled sales because they could not find appropriaternhelp. </p

“The surveyrnof our members shows that since June of 2012, residential construction firmsrnare reporting an increasing number of shortages in all aspects of the industry</b- from carpenters, excavators, framers, roofers and plumbers, to bricklayers,rnHVAC, building maintenance managers and weatherization workers. The same holdsrntrue for subcontractors," said NAHB Chief Economist David Crowe.</p

NAHB estimatedrnthat more than 1.4 housing jobs disappeared during the peak of the downturn. Manyrnconstruction workers found other employment while some trades retrainedrnconstruction workers and they are not returning to the residential constructionrnsector.<br /<br /"What used to be high-paying, skilled jobs vanished as builders across thernnation went out of business or were forced to let workers go," said NAHBrnChairman Rick Judson.  <br /<br /NAHB is trying to help meet the demand for skilled labor by providing careerrntraining and job placement in conjunction with the Home Builders Institutern(HBI).  HBI offers an array of portablernpre-apprenticeship training programs in a variety of skilled trades that can berncustomized to meet the workforce needs of communities across the nation. </p

“We arernramping up our efforts to train diverse populations and place them in jobs tornmeet the growing demand of the building sector,” said HBI President andrnCEO John Courson. <br /<br /A lack of buildable lots and increased costs for materials and labor are alsorncontributing to the problem, as the infrastructure that supports home buildingrnmoves to re-establish itself following the worst housing downturn since thernGreat Depression, Crowe said. </p

The problemsrnconfronting builders are also hurting job and economic growth. NAHB says thernconstruction of 1,000 single-family homes generates more than 3,000 jobs,rnapproximately $145.4 million in wages, and more than $89 million in federal,rnstate and local tax revenues. That doesn’t even count the increase in annualrnproperty taxes that local municipalities rely on to fund schools, police and firefighters.</p

As the economyrnmends, pent-up demand for housing will continue to grow as roughly 2 millionrnhousehold formations were delayed as a result of the Great Recession. In normalrneconomic times, demand for new homes should be about 1.7 million annually.<br /<br /"We need to look holistically at the home building infrastructure to meetrngrowing and future demand," said Judson. "To avoid a run-up in pricesrnin hot markets due to labor issues, we need to complement our current trainingrnprograms with a market-based visa system that would allow more immigrants tornlegally enter the construction workforce each year when there is a dearth ofrnworkers to fill the jobs that are needed."

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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