WASHINGTON – March 22, 2013 – Growing labor shortages in all facets of the residential construction sector are impeding the housing and economic recovery, according to a new survey conducted by the National Association of Home Builders (NAHB).
“The survey of our members shows that, since June of 2012, residential construction firms are reporting an increasing number of shortages in all aspects of the industry – from carpenters, excavators, framers, roofers and plumbers, to bricklayers, HVAC, building maintenance managers and weatherization workers. The same holds true for subcontractors,” says NAHB Chief Economist David Crowe.
More than half of the builders in the survey reported labor shortages over the past six months that caused them to pay higher wages or subcontractor bids. And, as a result, they were forced to raise home prices. Moreover, 46 percent of the builders surveyed experienced delays in completing projects on time, 15 percent had to turn down some projects and 9 percent lost or cancelled sales as a result of labor shortages.
Part of the reason for the labor shortage is attributed to the loss of skilled residential construction workers who, during the recession, sought employment elsewhere. Many don’t plan to return. The loss of tens of thousands of housing jobs mushroomed to more than 1.4 million during the peak of the downturn.
“What used to be high-paying, skilled jobs vanished as builders across the nation went out of business or were forced to let workers go,” says NAHB Chairman Rick Judson.
Meanwhile, a lack of buildable lots and increased costs for materials is also contributing to the problem, as the infrastructure that supports home building moves to re-establish itself following the worst housing downturn since the Great Depression, Crowe says.
NAHB says that worker shortages not only slowing the housing recovery, it also hurts job and economic growth. The association claims that construction of 1,000 single-family homes generates more than 3,000 jobs, approximately $145.4 million in wages, and more than $89 million in federal, state and local tax revenues. New homes also spark an increase in annual property taxes that local municipalities rely on to fund schools, police and firefighters.
NAHB anticipates total housing starts of 970,000 this year and 1.18 million in 2014 as the market continues a gradual rebound. In normal economic times, demand for new homes should be about 1.7 million annually.
“We need to look holistically at the home building infrastructure to meet growing and future demand,” says 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.”
© 2013 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.