Industry Market Trends

Housing Rebound Puts Pressure on Construction Worker Shortage

Jun 04, 2013

Although residential construction is expected to grow, builders cannot find enough qualified workers to keep up with the housing demand. The worker shortage spans across the construction sector, including HVAC, roofers, building maintenance managers, carpenters, and subcontractors, according to the National Association of Home Builders (NAHB).

Builders are struggling to find workers in areas of the U.S. where the demand is growing the most, such as California, Arizona, Texas, Colorado, and Florida, the Associated Press recently reported. The labor shortage is causing builders to pay higher wages to the subcontractors that are available, the NAHB revealed through survey findings in March.

As the housing market continues to rebound, the NAHB projects that total housing starts will reach 970,000 this year and expand to 1.18 million in 2014, increasing the need for more workers. Almost half of builders (46 percent) surveyed said they had delays in completing projects on time, while 15 percent indicated that they had to decline projects due to their worker shortage.

The building worker shortage is tied to the recession, during which construction activity plummeted and scores of workers found employment elsewhere. Immigrant workers dependent on residential building jobs either left the construction industries or returned to their native countries. "The loss of tens of thousands of jobs mushroomed to more than 1.4 million during the peak of the downturn. During this period, many [non-construction] trades retrained construction workers, and they are not returning to the residential construction sector," the NAHB report noted.

The situation is so severe that in some areas, rival contractors visit job sites to poach workers on the spot, CNN Money recently reported. "There's a lot of employee pilferage going on. It got so bad at the Exxon headquarters construction site [in Woodlands, Texas] they had to put in rules not to go after other construction workers," Jan Maly, president of the JM Maly construction company, in Houston, told CNN.

To help restore the worker supply, NAHB reveals that it is partnering with the Home Builders Institute (HBI) to provide career training in construction with several "portable pre-apprenticeship training programs in a variety of skilled trades," which can be customized to meet demand. Approximately 80 percent of HBI graduates are said to be placed in the building sector.

"We need to look holistically at the home building infrastructure to meet growing and future demand," said NAHB Chairman Rick Judson. "To avoid a run-up in prices in hot markets due to labor issues, we need to complement our current training programs with a market-based visa system that would allow more immigrants to legally enter the construction workforce each year when there is a dearth of workers to fill the jobs that are needed."