Daily Management Review

The US construction industry is suffering from labor shortage


08/21/2017


Shortage of labor and subcontractors in the US construction industry has increased over the past year, according to the housing market index of the National Association of Home Builders / Wells Fargo Housing Market.



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A survey of builders about the shortage of workers in 15 professions was conducted in July. To varying degrees, the shortage of workers is observed in each of the 15 professions: from the managers of the building services (43%) to the carpenters (about 75%).

Meanwhile, the lack of subcontractors is even more common. According to the results of the July survey, the level of deficit of subcontractors was higher than that of workers directly hired by builders in each of the 15 professions. So, 77% of builders reported a shortage of carpenters, builders of frame houses, while 85% of builders reported a shortage of subcontractors in this area.

According to the National Association of Home Builders (NAHB), this was not always the case: the average indicators of labor shortages and subcontractors since 1996 were quite close to each other. However, from 2013 there is a constant gap: the deficit of subcontractors in 9 positions is 5-7 percentage points higher.

One possible reason for the deficit is that some employees who were laid off and began to work independently for hire during a downturn in the housing market have returned to work in large companies, according to the NAHB. This slightly increased availability of workers directly hired by builders, while at the same time reducing the pool of firms available for subcontracting.

The average deficit in 9 professions increased from 21% in 2012 to 56% in 2016, and in 2017 it was 63%.

The average labor shortage in 9 occupations is now at its peak since 2000. The current shortage of labor seems particularly serious, given the construction of new homes, which only partially recovered from the recession seen after 2006.

"The historical trend has been fairly stable in the construction professions," the NAHB noted. "The shortage of workers in the majority of the profession is now more common than at any time since 2000. The exception is the deficit figures that have been at their peak since 1996, when the NAHB began interviewing. Among the workers directly employed, the shortage of painters is now at a historic high, and among the subcontractors, in addition to the painters, the deficit of carpenters and electricians also reached a record. "

But the most alarming signal is that, despite this "record" shortage of labor, wages in both the construction sector and the entire labor market are still refusing to show significant growth.

source: reuters.com






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