NAHB Institute’s premier report tracks deep dearth of workers

Sources: Home Builder Institute, Washington, D.C.; CP staff

The residential construction industry faces a shortfall of 200,000 skilled trades workers, according to the Home Builder Institute’s inaugural HBI Construction Labor Market Report. “This persistent challenge endangers the affordability and availability of housing and hinders a robust economic recovery,” affirms HBI CEO Ed Brady, noting how labor represents approximately 30 to 40 percent of the cost of typical new home.  

Launched as a semi-annual series with National Association of Home Builders Economics Group research, the report is based primarily on year-end 2020 data. Citing more recent numbers, Brady says the total shortfall climbed above 300,000 workers in January 2021, as the share of  builders reporting labor shortages was 60 percent. The percentage is especially high relative to an acceleration in single-and multi-family housing starts, from a seasonally adjusted rate of under 1 million units in April 2020 to rate of roughly 1.5 million units at year end. 

The numbers reported pertain to labor directly employed by builders, most of whom employ additional workers through subcontractors. “We estimate that builders subcontract more than 80 percent of the construction in the typical home they build,” Brady observes. “And worker shortages for subcontractors continue to be even more severe. That share of the costs is rising, due to the shortage of available labor. When you consider that scarcity of labor causes construction delays, which then creates further costs, you can see how both housing supply and affordability are negatively affected.” 

“As a nation, we need to build the next generation of skilled tradespeople,” he concludes. “That means recruiting more women. It means training and placing minority, lower income, and at-risk youth for job opportunities as an important way to fight against social inequity. It means providing trade skills education to veterans and transitioning military. And it means reaching out to high school students, and those who influence their decisions, to change their perception of careers in the trades.”

HBI is the nation’s largest provider of training for residential construction workers. It offers industry recognized curricula to upwards of 10,000 students annually through 220 sites, including high schools, military bases, community colleges, prisons, training facilities and Job Corps centers.

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