Builder Labor Shortage Grows More Severe

July 7, 2015

Shortages of labor and subcontractors -- first surfacing last year -- have grown even more widespread this year, according to a survey of single-family builders conducted by the National Association of Home Builders in June. 

The shortages are most evident in basic skills like carpentry. Sixty-nine percent of builders reported a shortage of construction workers willing an able to do rough carpentry. Framing crews and bricklayers or masons are also among the reported shortages. 

A shortage of subcontractors is also alarming, builders noted in the survey. In the construction of a single-family home, three-quarters of the construction work is usually completed by subcontractors, according to NAHB. Seventy-four percent of builders reported a shortage of subcontractors compared to 69 percent for labor directly employed. 

"The incidence of shortages is surprisingly high given the rate of new home construction, which has only partially recovered from its 2008 downturn," NAHB notes in its blog, Eye on Housing. The shortage is substantially higher than it was at the peak of the 2004-2005 boom, when annual starts averaged around 2 million compared to current rates of about 1 million, NAHB notes. 

The most common effects of the shortages have been leading builders to have to pay higher wages/subcontractor bids and forcing them to raise home prices. Also, builders say the shortage has made it difficult for them to complete projects on time. 

Source: "For Builders, Labor/Subcontractor Shortage Intensifies,"National Association of Home Builders’ Eye on Housing Blog (July 3, 2015)