For Remodelers, Shortages of Skilled Labor Remain Elevated

In response to NAHB’s Remodeling Market Index (RMI) survey for the 3rd quarter of 2018, roughly 85 percent of remodelers reported shortages of workers available to perform finished or rough carpentry, and nearly half (48 percent) classified the shortage of finished carpenters as serious.  Although these percentages are down slightly from a year earlier, they remain seriously elevated.

The RMI survey collected information on 16 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 a recent article on Young Adults & the Construction Trades.  In the 3rd quarter of 2018, over half of the remodelers reported shortages of labor in 12 of the 16 categories.  As usual, the reported shortages were most widespread for the three categories of carpenters, but over 60 percent of remodelers also reported shortages of bricklayers & masons (71 percent), concrete workers (70 percent) and drywall installers (65 percent).

NAHB began asking remodelers about labor shortages in 2013, modeling the questions on similar onesperiodically asked of single-family builders in the survey for the NAHB/Wells Fargo Housing Market Index.  For each of the trades tracked consistently since that time, the shortages peaked in 2017, then declined slightly in 2018.  The declines ranged from 1 percentage point (for electricians) to 8 percentage points (for roofers).  It is probably not surprising that shortages finally eased slightly in the latter part of 2018, given the way residential construction activity was softening at the time (as residential construction spending declined slightly every month from July through November, and total housing starts declined slightly every month from August through December).

Although the situation improved slightly in 2018, labor shortages in the remodeling industry remain widespread compared to earlier years.  In each of the trades covered, the incidence of reported shortages was markedly higher in 2018 than in 2016.  The differences ranged from 4 percentage points higher (for finished carpenters) to 18 points higher (for bricklayers and masons).

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 three effects single-family builders cite most often.

Brought to you by the NAHB’s Eye on Housing.

Written by Paul Emrath on May 1, 2019