Residential construction employment edges higher in December

Dive Brief:

Employment in the residential construction sector nudged up to 2.65 million in December from 2.64 million the month prior, according to a recent National Association of Home Builders’ analysis of Bureau of Labor Statistics data.
The monthly total includes 739,000 builders and 1.92 million residential specialty trade contractors. For 2016, builders and remodelers added a net total of 103,000 jobs. The post-recession increase in specialty trade contractors has been greater than that of builders.
Overall, there were 184,000 open construction sector jobs in November compared to the cycle high of 225,000 in July, according to data from the Job Openings and Labor Turnover Survey, which lags BLS monthly jobs data by one month.

Dive Insight:

The NAHB figures underline the growth in residential construction employment since the recession as new building activity increases in response to strong demand and limited existing inventory. That’s putting pressure on an already squeezed labor supply pipeline.

A survey by the Associated General Contractors of America this past summer found that the majority of contractors are struggling to find workers to fill hourly skilled jobs, echoing similar responses from builders polled by the NAHB earlier in the year.

The effect in many markets is increased construction costs and extended project timelines, in some cases adding to the price tag of the home.

Dallas-based housing analyst Ted Wilson told The Dallas Morning News earlier this month that housing starts in that region are down 40% from a decade ago, partly due to a tight labor market. Still, costs associated with the labor shortage are adding up to $4,000 to the sales price of new homes.

Labor shortage head winds are not expected to ease in the near-term, as robust demand for homes will underpin new building activity this year. The latest Commerce Department figures show housing starts down 4% from November to December but up 3.9% from December 2015 to an annualized rate of 795,000 while the multifamily category bounced back 53.9% month-to-month and was up 10.3% for the year at a rate of 417,000 starts.

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