In the News – Construction worker shortage weighs on hot U.S. housing market
The drumbeat of hammers echoes most mornings through suburban Denver, where Jay Small, the owner of company that frames houses, is building about 1,300 new homes this year.
That’s more than triple what he built a few years ago, when “you couldn’t buy a job” in the residential construction industry, he said.
Now, builders can’t buy enough workers to get the job done.
Eight years after the housing bust drove an estimated 30 percent of construction workers into new fields, homebuilders across the country are struggling to find workers at all levels of experience, according to the National Association of Homebuilders. The association estimates that there are approximately 200,000 unfilled construction jobs in the U.S. – a jump of 81 percent in the last two years.
The ratio of construction job openings to hiring, as measured by the Department of Labor, is at its highest level since 2007.
“The labor shortage is getting worse as demand is getting stronger,” said John Courson, chief executive of the Home Builders Institute, a national nonprofit that trains workers in the construction field.
The impact is two-fold. Without enough workers, residential construction is trailing demand for homes, dampening the overall economy.
And with labor costs rising, homebuilders are building more expensive homes to maintain their margins, which means they are abandoning the starter home market. That has left entry-level homes in tight supply, shutting out many would-be buyers at a time when mortgage rates are near historic lows.
Nationwide, there are 17 percent fewer people working in construction than at the market peak, with some states – including Arizona, California, Georgia and Missouri – seeing declines of 20 percent or more, according to data from the Associated General Contractors of America.
The labor shortage is raising builders’ costs – and workers’ wages – and slowing down construction.
Small, the Denver builder, estimates that he could construct at least 10 percent more homes this year if he had enough workers. But he remains short-staffed, despite raising pay to levels above what he paid during the housing bubble a decade ago.
“It’s getting to the point where you’re really limited in what you can deliver,” Small said. “We lost so many people in the crash, and we’re just not getting them back.”
Check out the full artilce and video straight from the source, Reuters.com