Builders See Shortages of Labor and—Especially—Subcontractors

Data from a June 2014 NAHB survey show that shortages of labor and subcontractors have become substantially more widespread since 2013.   Shortages are particularly acute for workers with basic skills like carpentry, who are needed in significant numbers during the construction of any home.

Labor Trades ChartThe incidence of reported shortages is also surprisingly high relative to the current state of new home construction, which has only very partially recovered from its 2008 downturn.   Averaged across 9 key trades that have been consistently covered in NAHB surveys, 46 percent of builders reported a shortage in 2014. This is the highest the 9-trade shortage has been since 2000—slightly higher even than at the peak of the boom in 2004 and 2005, when the U.S. was averaging around 2 million housing starts a year, compared to current rates that have mostly remained under 1 million.

History ChartIn the late 1990s, reported shortages were more widespread than they are now,  but many things were in different in the late 1990s. In particular, GDP growth was consistently above 4 percent during that period, which drove the unemployment rate down to 4.0 percent.

The June 2014 NAHB survey data also show more builders reporting a shortage of subcontractors than of workers they employ directly. Partly as a result, costs of subcontractors are rising faster for builders than costs of directly-employed workers.

On average, builders said their direct labor costs on the same house had increased by 2.9 percent, while subcontractor costs increased 3.8 percent. Both numbers were up sharply from March of last year (the first time this particular question was included in the survey).

Cost Chart

One implication is that any reporting of construction labor statistics that ignores the effects of subcontracting is likely to understate the magnitude and impact of the shortages.  For a description of the survey questionnaire and many other details, the full study is available online.

Tags: , , , , , , ,

11 replies

  1. With the NAHB clamoring for immigration reform, it would seem to me that they perceive the issue as being a need for unskilled labor to come across the boarder to solve all their shortages. Can anyone really tell me if the labor issues are real, or is the lobbying efforts of the NAHB simply spending the member’s dues to manipulate the political scene?

    OR, is there an untold truth that all homebuilding tradesmen are interchangeable with unskilled labor and this post has simply misused the term skill as it relates to the supply of, or shortages of skills? I just cannot reconcile this report of a shortage of skilled tradesmen with the position taken on immigration by the NAHB.

    • The term skill appears once in the post, and it refers to the categories listed in the first chart–carpenters-rough, framing crews, etc. The information on shortages comes directly from single-family builders responding to the survey that underpins the NAHB/Wells Fargo Housing Market Index. Most of it has been collected in a consistent fashion since the 1990s. For anyone seeking to evaluate the quality of the information further, I recommend clicking on the link at the bottom of the post, which takes you to the full study with more detail on how the data were collected and analyzed.

  2. If the owners had not put the squeeze on general contractors. And the general contractors had not looked to the subs to make up for their lower profits by putting the squeeze on the subs, there would not be a shortage of skilled tradesmen. I am a brick mason and have seen many of my friends and former competitors leave the masonry business because it makes no sense to pay to do a general contractors projects. The practice of the construction industry using illegal immigrants to perform work only hurts the American worker and our entire industry. The question is, are you going to sell your soul for a dollar? I choose not to participate. I do not work for the large house builders as their only concern seems to be bottom line, not quality or pride in what they produce. Just the opinion of a mason with 40 years of experience, the son of a mason and the father of three masons.

  3. I guess your survey didn’t survey me. I’m not short, and my name isn’t “shortage”. I’m a general contractor and subcontractor. If someone need service in NC state area have them visit my website and contact me. I think your survey’s problem is more “Economic Conditions” than a “Shortage Of Subcontractors”. As subcontractors we have pride and we don’t work for peanuts. In this economic climate companies want to hire and pay nothing by turning subcontractors into hourly workers. When I pay any insurance, mortgage or bank bill or need auto mechanic work done, they never adjust their rates inline with economic conditions. But when it comes to a home for sell, repair, subcontract labor….etc., everyone want skilled labor to bend over backwards

  4. Looking for subcontractor opportunity, inorder to get grades for my cidb

  5. Hello,

    Is it possible to access data for this study? In particular, data showing rise in labor costs for construction trades?

    Also, I am interested in knowing the %age of total costs that labor costs represent and if these have changed?

    Thank you,

    • See the July 3, 2015 post “For Builders, Labor/Subcontractor Shortage Intensifies,” and click on the link for the “full report” which contains the complete history for every question in the survey, including how labor and subcontractor costs have changed. It’s difficult to get labor as a %of total cost from a survey of builders, as most of the labor is employed indirectly by subcontractors. Standard source is the Economic Census, conducted every five years. We summarized the last one in our article “Home Building Census” ( See in particular Chart 7.


  1. Green General Contractor in Baltimore and DC | Harbor Builders Green General Contractor in Baltimore and Washington | Subcontractor Shortages
  2. Builders Say Labor Shortages Grow More Widespread | Real Estate, Updates, News and Tips
  3. 37% Of Home Builders Report Shortages of Electricians | EleBlog
  4. Construction Bucks Conventional Wisdom « Cooper Roofing & Solar

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: