Eye On Housing
According to the most recent American Community Survey (ACS), the number of immigrant workers in construction approached 2.8 million in 2019, the highest level recorded by the ACS. Immigrant workers now account for 24% of the construction workforce, slightly below the 2016 record high share of 24.4%. The share of immigrants is higher in construction trades, reaching 30%. The latest statistics confirm that immigrant workers remain a vital source of labor to the construction industry amid ongoing skilled labor shortages exacerbated by a pandemic boost to housing demand.
The latest ACS data show that 11.5 million workers, including self-employed, worked in construction in 2019. Out of these, 8.7 million were native-born, and 2.8 million were foreign-born.
While the number of immigrant workers in construction reached a new record high, breaking the housing boom era record levels, the number of native-born workers in construction remained 7% below the cyclical high reached in 2006, when 9.4 million native-born workers were in construction.
Source: 2004-2019 ACS PUMS, NAHB estimates
Even as native-born workers have generally been a lagging source of construction workforce growth, 2019 registered a noticeable increase in their numbers. As a result, the share of immigrants declined slightly in 2019 but nevertheless remains at historically high levels.
Another contributing factor to the recently declining share of immigrants was a noticeable decrease in the inflow of newly arrived immigrants into the construction work force. Just over 44,000 new immigrants entered the construction industry in 2017 and additional 56,000 in 2018. This is a substantial drop even compared to 2016, when over 67,000 new immigrants joined in. In comparison, over 130,000 new immigrants were joining the construction labor force annually in 2004 and 2005.
Source: 2004-2019 ACS PUMS, NAHB estimates
NAHB’s earlier research showed that over the last 15 years, the time span these data are available, the annual flow of new immigrant workers into construction remained highly correlated with measures of new home construction, especially new single-family starts. The number of newly arrived immigrants in construction rose rapidly when housing starts were rising and declined precipitously when the housing industry was contracting. The response of immigration has been quite rapid, occurring in the same year as a change in the single-family construction activity. This correlation broke in 2017 when NAHB’s estimates showed a surprising drop in the number of new immigrants in construction despite steady gains in housing starts.
The 2017 noticeable drop and 2018 anemic gains in the number of new immigrants in construction may seem puzzling given favorable economic conditions but most likely reflect changes in the US immigration policies.
Similar trends are observed in the rest of the US economy, with the share of immigrants in the labor force stabilizing at record high levels but showing no further gains in recent years. Over the last 15 years, the entire US labor force has become more dependent on foreign-born labor with its share rising from less than 15% in 2004 to 17% in 2019. Excluding construction, where the reliance on foreign-born workers is greater, the share of immigrants in the US labor force increased from just over 14% in 2004 to 16.6%, the highest level recorded by the ACS, in 2018. The share of immigrants stabilized at these record high levels with no further increases in 2019.
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