Record Share of NAHB Members Report Labor Shortages

Filed in Economics, Workforce Development by on November 16, 2021 2 Comments

Labor shortages, as reported by single-family builders and remodelers in NAHB’s latest surveys, have hit unprecedented highs since each of the surveys began and continue to exacerbate housing affordability challenges, along with lot shortages and heightened material costs.

According to the October 2021 survey for the NAHB/Well Fargo Housing Market Index (HMI), more than 55% of single-family builders reported a shortage of labor across 16 home-building trades, with the greatest shortage noted among carpentry trades (rough, finished and framing crews). The third quarter 2021 NAHB/Royal Building Products Remodeling Market Index  (RMI) survey provided similar results across each of the same 16 trades, including a heightened challenge for rough and finished carpentry.

Graph of labor shortages - directly employed

The same surveys indicate that subcontractor shortages are even more widespread than shortages of labor employed directly by general contractors. At least 90% of single-family builders reported a shortage of subcontractors in each of the three categories of carpenters, and 80% to 85% reported a shortage of subcontractors in six other trades. Meanwhile, at least 90% of remodelers reported a shortage of subcontractors among carpenters, as well as concrete workers. Overall, more than 80% of remodelers reported a shortage of subcontractors in 11 of the 16 trades.

Graph of labor shortages - subcontractors

Among remodelers, shortages across those trades increased from 23% to 66% for direct employees and from 25% to 65% for subcontractors during 2013 to 2017, before spiking again to 76% and 81%, respectively, in the latest survey.

Among single-family builders, the record 76% of shortages reported in October 2021 is significantly higher than the previous peak of 67% established at the end of the 1990s and the 45% reached during the housing boom of the mid-2000s.

historical graph of labor shortages for single-family builders

Attracting skilled labor will remain a key objective for construction firms in the coming quarters and will become more challenging as the labor market strengthens and the unemployment rate declines. According to the September BLS Job Openings and Labor Turnover Survey (JOLTS) data, total national job openings stands at 10.4 million. Open construction jobs declined somewhat to 333,000 unfilled positions in September, while the hiring rate remained solid at 4.7% and the layoff rate hit a four-year low of 1.6%.

Paul Emrath, NAHB vice president for survey and housing policy research, provides more analysis in this Eye on Housing post.

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Comments (2)

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  1. Paul Bouman says:

    We have a 100 unit over 55 apartment complex under construction. Funding approved over a year ago. Have the infrastructure 80 percent completed, a couple of foundations in. Now dead in the water. Trades have no workers, plus material problems. Looking at a forty percent cost overrun. Can somebody give me a reasonable explanation of where the workers are. How about the ‘transitory’ cost increase. Shall I just wait?

  2. Matthew Lane says:

    As an immigrant carpenter, having gone through a five year apprenticeship program in England and now working in the US for the past six years there’s one phrase that comes to mind, ‘You reap what you sow.’

    There are little to no high school trade programs. Quantity is put over quality.
    Home Builders associations that focus on lobbying and golf trips.
    An industry focused on products that can be installed with nothing more than a screw or calk gun.
    Municipalities that have no prerequisite for obtaining a contractors license.
    No qualifications required for carpenters, brick layers, drywall, tile setters.
    Box stores that claim to pump money into the trades with little results.
    Teachers unions that are incentivized for pushing kids into college.
    An industry with little imagination and vision for fixing the problem.

    The UKs apprenticeship program resembled that of Americas until the late 80s. It’s about to go through another overhaul for carpenters, splitting the qualification into two paths. Traditional or Craft carpenter and technical carpenter. Someone capable programming and operation CNC machines.

    I’ve lived and worked in several countries. Spoke with thousands of trades people, read hundreds of articles, contemplated the situation deeply and I can confidently say that the situation is only going to worsen. The situation will be kicked down the road until it’s past the point of return. Standards are so low that machines and robots will inevitably be introduced where they can to produce pre-fab’d new homes.
    Trades people will remain but only to work on the homes of those that can afford it.

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