The housing market, which had played a prominent role in crippling the economy back in 2007 through 2009, has since seen favorable trends over the past few years. Banks have once again become more comfortable in lending for mortgages. The drop in unemployment from 9.9% in 2010 to 5.1% in August 2015 has also aided the housing recovery. While the lack of lending and general state of the economy stalled both residential and commercial construction activity for quite some time, it seems that there is room for growth now. However, residential and commercial contractors have a new problem. Where did all the laborers go?
While the percentage of construction spending has shown a significant increase during 2015, the number of skilled workers to accompany that growth is nowhere to be found. The result has been an inability to keep up with consumer demand in new home construction as well as commercial construction efforts. The decrease in available laborers has driven up labor costs significantly for contractors. As a result of the increased labor costs and reduction of skilled laborers, contractors are struggling to meet the market’s demands for new construction, particularly as it relates to new residential construction.
During the housing bubble, new construction slowed significantly, causing many skilled laborers to find alternative sources of work. In addition to skilled laborers finding alternative sources of work, many of these individuals have also reached the age of retirement. Furthermore, there are fewer younger individuals willing and ready to fill the void. According to the Bureau of Labor Statistics (BLS), there were approximately 143,000 construction position openings across the United States as of June 2015. The need for construction workers is expected to continue to grow over the next 5 to 10 years, according to the BLS. In order for construction firms to keep up with the growing demand over the next several years, they must find a way to attract millennials to the workforce.