For Remodelers, Labor Shortages Resume Aggravating Trend

Ninety-one percent of remodelers reported shortages of labor available to perform finished or rough carpentry work, and over 40 percent said these shortages were serious, in response to special questions on NAHB’s Remodeling Market Index (RMI) survey for the 3rd quarter of 2017.

The RMI survey asked remodelers about availability of labor in 15 specific occupations that were either specifically recommended by Home Builders Institute (NAHB’s workforce development arm) or that NAHB found to be particularly significant when tabulating Bureau of Labor Statistics data for an article on Young Adults & the Construction Trades.  In the 3rd quarter of 2017, over half of  remodelers reported shortages in 12 of the 15 categories.  As usual, reported shortages were most widespread for the three categories of carpenters, but over 70 percent of remodelers also reported shortages of bricklayers & masons, drywall installers, and concrete workers.

Historically, NAHB began asking remodelers about labor availability in 2013, initially covering a total of 12 occupations.  Many of the 12 have followed a similar pattern since that time, with shortage percentages that skyrocketed between 2013 and 2014 and plateaued somewhere between 2014 and 2016, before resuming an upward, worsening trend.

A prime example is the reported shortage of rough carpenters, which increased from 40 percent in 2013 to 78 percent in 2015, remained unchanged in 2016, but then increased again in 2017.  Over the same period, the shortage percentages for finished carpenters, framing crews and roofers followed similar—and almost perfectly parallel—trend lines.  For bricklayers & masons, the incidence of shortages plateaued a year earlier, at a little under 50 percent in 2014 and 2015, but then resumed its upward trend in both 2016 and 2017.

For many trades that had not been much of a problem initially, the incidence of shortages has increased steadily, to the point that they too are now a concern.  For weatherization workers, the share of remodelers reporting a shortage increased regularly from 20 percent in 2013 to 48 percent in 2017.  For HVAC workers, the trend has been even steeper, with a  shortage percentage that climbed from 12 to 54 percent during that period.  Historical trends for trades not shown above are available in the full report.

The bottom line is that, for every one of the 12 trades covered by NAHB’s RMI survey in both years, the share of remodelers reporting a shortage jumped by more than 10 percentage points between 2016 and 2017.  The most common effects of the shortages have been causing remodelers to pay higher wages, forcing them to raise prices to customers, and making it difficult to complete projects on time.  These are the same effects single-family builders cite most often.

For home owners contemplating substantial improvement projects, the effects of labor shortages go a considerable way toward explaining why estimated costs may be coming in higher than they were anticipating—although recent increases in prices for building materials, especially lumber and drywall, are also a contributing factor.

 



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