Growing Labor Shortages Impeding Housing Recovery
Growing labor shortages in all facets of the residential construction sector are impeding the housing recovery, according to the National Association of Home Builders (NAHB).
“They survey of our members shows that since June 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, “said NAHB Chief Economist David Crowe.
The survey also found that more than half of the builders reported that labor shortages over the past six months have caused them to pay higher wages or subcontractor bids to secure projects, and consequently, 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 recent labor shortages.
Part of the reason for labor shortages can be attributed to the fact that many skilled residential construction workers were forced to seek employment elsewhere during the recession and are no longer currently available.
The loss of tens of thousands of housing jobs mushroomed to more than 1.4 million during the peak of the downturn. During this period, many trades retrained construction workers and they are not returning to the residential construction sector
Nationally, the 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. That doesn't count the increase in annual property taxes that local municipalities rely on to fund schools, police and firefighters.
As the economy mends, pent-up demand for housing will continue to grow, as roughly 2 million household formations were delayed as a result of the Great Recession. In normal economic times, demand for new homes should be about 1.7 million annually. NAHB is anticipating total housing starts of 970,000 this year and 1.18 million in 2014 as the market continues to gradual rebound.