Labor Shortages Remain Top Concern for Builders

Filed in Economics by on February 20, 2020 72 Comments

The cost and availability of labor continues to stand out as the most significant challenge that builders will face in 2020, according to a recent survey of members that ran in the monthly NAHB/Wells Fargo Housing Market Index (HMI).

More than four out of five builders – 85% – expect to face serious challenges regarding the cost and availability of labor this year, down slightly from the 87% who rated this issue as their top concern in 2019.

Building material prices and the cost and availability of lots were tied as the No. 2 problem expect to face in 2020, with these issues cited by 66% of the survey respondents.

All three of these supply-side issues have been a growing concern for builders over the past several years. To put it into perspective, in 2011, just 13% of builders cited labor issues as an important concern, with the rate steadily rising over the ensuing years before peaking at 87% last year.

Likewise, the cost and availability of lots were reported as a significant problem by 21% of builders in 2011, and the percentage steadily increased over the following years, reaching a high of 66% in 2020.

Meanwhile, building material prices was reported as a significant problem by 33% of builders in 2011. In the ensuing years, builder concerns regarding this issue ranged from 42% in 2015 to a peak of 87% in 2018.

Rounding out the top five concerns for builders in 2020 are impact/hook-up/inspection or other fees (60%) and gridlock/uncertainty in Washington making buyers more cautious (56%).

NAHB economist Ashok Chaluvadi provides more analysis on the labor shortages and the rest of the top 10 list in this Eye on Housing blog post.

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  1. Daniel Lloyd says:

    What is nahb doing in Congress to encourage immigration reform relative to the labor shortage ? Are we doing enough to raise the consciousness of Congress 2 allow more immigrants 2 obtain work visas or permits here in the states?

    • NAHB Now says:

      NAHB continues to support the annual cap to allow for additional H2-B seasonal worker visas, which some NAHB members have been able to qualify for. In addition, NAHB continues to advocate for the creation of a year-round, market-based guest worker program that allows the construction sector to access skilled temporary foreign labor. NAHB is also urging Congress to increase funding for job traiing programs to preopare individuals for careers in home building.

  2. Lucy Stokes says:

    I really wonder if our industry is connecting the dots with the president we have. I went to a presentation of our lobbyist and economist. The ohhing and ahhing the lobbyist did about the access he had to the White House was really impressive. What are we getting for this access?????

    When someone said we had to have movement on tariffs and immigration he said and I quote “that is not happening”. Well those two issues impact the first two items significantly.

    I just do not understand.

  3. scott mauldin says:

    Bring back trade schools in high school and lets start educating and training our own labor , instead of illegally importing it

  4. Roger Papineau says:

    scott mauldin is spot on. Current law prevents students from “really” working on the job site. Humping lumber isn’t going to encourage anyone to pursue the trades. We need new legislation that would permit high school aged students to work under supervision doing real work, including operating power tools.

  5. TJ says:

    My company was sign up with local school, training trade about maintenance in building so we have good 10 years every spring semester two or three student come and learn how to Maintain Building ( Light work ) was good for student they start slow and go to local sub contractor to help to trade.
    Last administrator stop funding and stop program . I wish continued program.

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