Construction Worker Shortage Hampering Homebuilding
July 26, 2024
Worker shortages in the construction trades are contributing to project delays, rising costs, and other challenges for both homebuilders and nonresidential contractors.
As a result of the labor shortage it’s taking longer to build homes. In 2022, it took an average of 8.3 months to build a single family homes. That’s the longest since the Census Bureau began collecting data in 1971. The extended timeline means it costs more to build a house—an expense that is passed on to buyers.
Industry watchers at the Joint Center for Housing Studies at Harvard University (JCHS) point to two factors as primary causes for the shortfall in skilled labor:
- Difficulty in attracting and retaining young people, women, and people of color.
- A decline in new immigrant trades workers who have historically filled the gap.
The industry has struggled to rebuild its workforce since losing nearly 1 million workers during the Great Recession, according to JCHS. “In 2022, the number of people with construction trade occupations (both employed and unemployed) was 6.2 million, 11 percent lower than in 2007 and still 2 percent lower than before the pandemic,” wrote Sophie Huang, a graduate research assistant at the Center.
Fewer new immigrant workers—who have historically filled in labor gaps—has compounded the shortfall. About a third of construction trade workers were foreign-born in 2022.
“To address workforce demand that drives the US economy, Congress must look toward much-needed reforms to our legal immigration system and provide high-demand industries, like construction, with access to new or expanded visa programs,” said Michael Bellaman, president and CEO of Associated Builders and Contractors (ABC).
Surveys by the National Association of Home Builders (NAHB) indicate construction jobs are an unpopular career choice for young adults. Data show the percentage of workers in construction trades under age 35 is on a downward spiral.
New efforts are underway to reverse that trend and expose younger generations to career opportunities. Initiatives include expanding vocational training and apprenticeships programs to provide students with hands-on experience and technical skills training in carpentry, plumbing, electrical work, and masonry.
Other recent efforts promote diversity and inclusion with a focus on correcting the large gender imbalance in construction. In 2022, women made up just 3.3% of workers in construction trades and 11% of construction workers overall.
Nonprofit organizations and apprenticeships have been created to attract women, people of color, and individuals from underserved communities to careers in construction.
“The shortage of skilled labor in the construction industry is a multifaceted challenge that requires comprehensive solutions,” Huang wrote. She also suggested complimentary immigration policies would help to ensure that the trades workforce avoids future costly gaps in labor supply.
A report in Contractor magazine stated the construction industry will need to attract an estimated 501,000 additional workers on top of the normal pace of hiring in 2024 to meet the demand for labor, citing data from ABC. Not addressing the shortage “will slow improvements to our shared built environment, worker productivity, living standards and the places where we heal, learn, play, work, and gather,” said Bellaman.
ABC Chief Economist Anirban Basu said supply and demand is affected by “structural factors, including outsized retirement levels, megaprojects in several private and public construction segments, and cultural factors that encourage too few young people to enter the skilled construction trades.” With more than 1 in 5 construction workers age 55 or older, Basu said retirement will continue to contract the industry’s workforce.
To address the shortage and grow the construction talent pool, ABC has a network of more than 800 apprenticeship, craft, health and safety and management education programs.
To “build the people who build America,” ABC invested $1.6 billion in 2021 to educate 1.3 million course attendees.
The Construction Industry Training Council of Washington offers a dozen 2-to 5-year construction training programs statewide ranging from carpentry to electrical and equipment operators. It also has state-approved continuing education courses, skills assessments and performance verification testing, and apprenticeships where education and job assistance are benefits.