The Ongoing Skilled Labor Shortage Is Taking a Serious Toll on the Construction Industry

A year that should have home builders across the country jumping for joy has instead found them tearing out their hair in frustration. After all, consumer confidence and the demand for new homes are high, while the supply of available properties and both unemployment and interest rates remain relatively low. Generally, that’s the perfect formula for success in the construction market. Unfortunately, something else is drastically low as well — the supply of skilled labor.

Several factors have combined to create a labor market that has U.S. homebuilders clamoring for qualified workers. That low unemployment rate — the lowest in nearly 50 years, in fact — is one. But add to that the nation-wide shortage of trade schools designed to turn out skilled craftsmen (and, thanks to a lack of emphasis on the trades in public schools, a dearth of students interested in enrolling), fewer immigrant workers than in past decades and a surge in construction across every sector, and you have a perfect storm that is hitting American home builders hard in 2018 and is expected to continue well into the new year.

While the historically low unemployment rate has been a boon for most industries, it’s having the opposite effect on the construction business. According to a joint report issued by the Associated General Contractors of America (AGC) and Autodesk, 80% of construction firms report they are having a difficulty filling hourly skilled labor positions that represent the majority of the construction workforce. According to the participants surveyed for the report, 72% said it’s more difficult to find pipe layers, 68% said they were having difficulty finding sheet metal workers, 67% are having trouble finding carpenters, 67% are having a hard time finding concrete workers, 64% are struggling to find roofers and 64% are toiling to find heavy equipment operators. Other positions that companies are having difficulty finding include bricklayers, iron workers, plumbers and electricians.

Exacerbating the problem is the fact that young people are showing less and less interest in careers in construction. According to an analysis of U.S. Census data by Issi Romem, chief economist at construction data firm BuildZoom, the percentage of construction workers 24 years and younger has decreased in 48 states since 2005, the year of the last housing boom in 2005. In addition, the share of young construction workers nationwide dropped almost 30% from 2005 through 2016.

“There was a huge push in the '90s and even in the early 2000s that if you were going to be successful, you needed to go to college,”  says Tyson Conrad, president and founder of Tampa-based Goliath Construction Consulting. “And you add to that the Baby Boomers all migrating out of the workforce — now you've got a trifecta of major issues. You have few people going in, a lot of people going out.”

Given the extent of the labor shortage and the effect it’s having on the country at large, educators across the nation are beginning to focus on bringing shop classes back into the schools, and industry groups are developing comprehensive career training programs to entice young workers into the trades. 

To make matters worse, the shortage could also be putting the safety of the workers who are available in jeopardy. According to the third-quarter 2018 USG Corporation + U.S. Chamber of Commerce Commercial Construction Index report, 80% of the contractors surveyed said they were either highly concerned (26%) or moderately concerned about the safety risks created by having too few skilled workers on their job sites, since the combination of skills and experience are what help to create a safe workplace.

But while this lack of qualified tradesmen is causing home builders to suffer, it’s home buyers who end up paying the price in the end — literally. With a shortage of qualified help, homes are taking longer to build, and they ultimately end up being more expensive, in part because contractors have to pay higher wages to entice the tradesmen who are available to work on their projects.

“It has caused a spike in wages because frankly, they are going out and recruiting other people's workers to fulfill their needs by offering higher prices,” said John Courson, president and CEO of the Home Builders Institute.

Fortunately CBUSA is the perfect place for home builders to find the skilled labor they so desperately need. Our 400+ builder network in 27 markets is a great resource for highly qualified and vetted tradesmen and subcontractors. 

Find out how CBUSA can help your firm overcome the current skilled-labor shortage at CBUSA.us.

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