As the housing market shows signs of recovery and inventory remains low, the demand for new homes is bustling. But there’s one problem – builders across the country are having a hard time finding skilled construction workers to build them.
Many skilled laborers who worked in residential construction – plumbers, electricians and carpenters – left the industry when the economy plunged into a recession and new homebuilding stalled. And though the housing market has picked up, they haven’t been coming back as quickly as expected.
“People don’t have enough confidence to take the leap to leave their current jobs and go back to construction,” said Anirban Basu, chief economist at Associated Builders and Contractors.
Meanwhile, an aging workforce and a lack of younger workers entering the construction industry has also widened the gap.
More than half of homebuilders said they experienced labor shortages, according to a survey conducted by the National Association of Homebuilders in March. Almost half also said they had to delay completing their projects because of such shortages.
The construction industry lost 2.2 million jobs since 2007, forcing many construction workers to transition into other housing-related sectors like retail, distribution and trucking. Others moved out of state or went back home to Mexico. Some decided to retire early.
“The really tough part of this downturn was that it was so prolonged people couldn’t sit on the sidelines forever,” said Ted Wilson, principal and analyst at Residential Strategies, a Dallas-based housing research firm.
One constructor Wilson used to know in Dallas is now building prisons instead of homes in South Texas.
Jim Way, 52, used to run his own construction company in Alaska, but now works for a local housing agency. In 2009, when a friend of his who worked at the organization told him about a job opening up, he couldn’t pass up the chance.
“I wanted more consistent work,” Way said. “The money isn’t the same, but it’s been okay.”
While workers have been hesitant to return to construction temporarily, economists also believe there’s a long-term shortage ahead that could hurt also the industry. Younger workers aren’t entering construction as much as they used to and the ones that are working now are close to retiring.
“The shortages that you’re hearing about now will only be more profound,” Basu said.
According to the Bureau of Labor Statistics, almost 40 percent of construction workers were over the age of 45 in 2011. Only seven percent were workers between the ages of 20 and 24.
““Younger workers want jobs that are technologically intensive,” Basu said. They’re not thinking about construction or hard hats.”
The Home Builders Institute, which partners with local school systems, has been trying to attract new workers to the field.
“We’re finding a need to train new entrants into the building trades as many construction workers retrained for other jobs,” said John Courson, president of the Home Builders Institute.
Meanwhile, the tight supply of homes will continue to spur a demand for new homes. Building permits applications were up by 33.8 percent and housing starts were up by 27.7 percent since last year, according to the Census Bureau.
The shortage of workers has forced some homebuilders to pay higher wages in order to compete for the limited number of skilled employees.
Ryan Stalder, a general contractor in California, said he’s had no trouble finding low-skilled labor, but when it comes high-skilled workers like plumbers and carpenters, things haven’t been as easy.
“I haven’t been able to get a guy to do electrical stuff for cheap in a while,” Stalder said. He says that many of those he worked with went into more industrial, non-residential work.
The shortage of workers could mean more expensive housing in the long-run.
“The presumption is that this will not be good,” Basu said.