Labor shortage weakening housing supply
Washington, DC — A shortage of construction workers is a major limiting factor in improving housing stock and affordability, according to the Home Builders Institute’s (HBIs) Fall 2021 construction labor market report released today.
The report warns that the number of construction workers required to keep up with demand is about 740,000 new workers a year for the next three years, based on a new analysis of Bureau of Labor Statistics data by the National Association of Home Builders (NAHB). ). The estimate is determined by approximating the required net employment growth as a result of the construction expansion plus the labor force required to replace people who leave the sector permanently.
“The construction industry needs more than 61,000 new hires each month to keep pace with both industry growth and job losses, whether through retirement or simply leaving the industry for good,” said Ed Brady, president and CEO from HBI. “From 2022 to 2024, this total represents a need for an additional 2.2 million new construction hires.”
The report, based on research from NAHB’s Economics Group, provides an overview of the state of the construction labor market in the country. Other key findings include:
- The number of vacancies in the construction sector currently averages between 300,000 and 400,000 per month.
- Half of construction contractors earn more than $50,460 per year and the top 25% earn at least $71,000. In comparison, the median wage in the US is $49,150 while the top 25% earn at least $67,410.
- Currently, construction employment stands at 7.42 million. Residential construction represents 3.1 million of this total amount.
- Self-employed construction workers currently make up 22% of the workforce, up from 26% in 2010.
- The proportion of immigrants in the construction sector is 30%.
- Women represent a slightly growing share of employment in construction, reaching 10.9% in 2020, from 10.3% in 2019.
- The median age of construction workers is 41. However, due to the aging population, the proportion of construction workers aged 25 to 54 has decreased from 72.2% in 2015 to 69.0% in 2019.
“The construction labor shortage has reached crisis levels,” Brady said. “The situation will become more challenging in the coming year as other industries recover and offer competitive wages and benefits to potential workers.”
According to Brady, the six most important steps homebuilders can take to increase the number of skilled construction workers in the United States are as follows:
- Reach high school students and those who influence their decisions to change their perception of construction careers.
- Increase workers’ wages while balancing the need to keep home ownership affordable.
- Attract more women to careers in construction.
- Educate and place more youth and adults from minorities and lower incomes for employment opportunities.
- Increase trade skills education for veterans and military personnel in transition.
- Work for a two-pronged approach to sensible immigration policy.