Young Construction Workers Mean More Monitoring, Longer Projects

As described in a previous post, employment in the residential construction industry reached 2.68 million in January of this year.  Although this is still well short of the 3.45 million at the peak of the boom in 2006, it nevertheless represents an increase of more than 700,000 jobs since the employment trough of the Great Recession in 2011.

This raises some questions. Are a lot of the added employees older workers who were forced out of the industry during the downturn and are now returning, or are they mostly younger workers entering the industry for the first time?  And, if they are younger workers, what effects are they having in the industry?  Are builders making any adjustments in their businesses to accommodate them?

NAHB investigated this with two special questions added to the February survey for the NAHB/Wells Fargo Housing Market Index. A total of 298 single-family builders responded to these questions, the first of which simply asked if builders noticed any tendency for older workers to be replaced by younger, less experienced ones over the past 12 months.  Sixty-three percent said yes, either to a minor extent (43 percent) or major extent (20 percent).

 

Builders who said yes to a major or minor extent were then asked about effects on their business. The most common responses were that the younger workers required more monitoring in order to be sure the quality of construction was maintained (70 percent) and that there was a loss of efficiency, so that construction projects were taking longer to complete (61 percent).   Relatively few said that the inflow of less experienced workers was constraining hourly wage rates.

Note that the statistics quoted at the start of this post are based on payroll employees only. In residential construction , a lot of the physical labor can also be performed by self-employed owners of small businesses,  By combing data from two sources, NAHB estimated that the total of payroll employees plus self-employed business owners working in residential construction was nearly 3.8 million in 2015 (see the Dec 2016 Special Study in HousingEconomics.com).



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