America’s ongoing shortage of skilled construction workers is hurting the broader economy, according to the Fall 2023 Construction Labor Market Report from the Home Builders Institute (HBI).
The report was compiled by the economics department of the National Association of Home Builders (NAHB). HBI is NAHB’s workforce development partner.
While tight monetary policy conditions have raised interest rates and slowed home building, the demand for new construction will rebound in 2024 as interest rates fall back.
More Workers Needed for Demand
The construction industry needs to hire roughly 723,000 workers each year to keep pace with demand, according to NAHB Economics’ analysis of Bureau of Labor Statistics data and projections.
“While tight monetary policy conditions have raised interest rates and slowed home building, the demand for new construction will rebound in 2024 as interest rates fall back,” says NAHB Chief Economist Robert Dietz. “The large structural housing deficit in the United States will support the need for home building in the years ahead. These higher future levels of construction will require more skilled construction workers.”
Other key findings of the report include:
• There are currently 8 million construction workers, and 3.3 million of them work in residential construction
• Demand for construction workers has weakened due to the housing downturn, but year-over-year gains remain solid, with 42,400 net residential construction jobs added over the last 12 months
• The number of open construction sector jobs had declined to 363,000 by mid-2023 after peaking at just below 500,000 at the end of 2022
• Construction employment is broad-based across the nation
• Construction attracts 6.5% of all employed veterans
• Hispanics make up close to a third of construction's workforce (31.5%), a new record-high share
• Self-employment in construction is currently 23% of the labor force, down from 26% in 2010
• Immigrant workers now account for 24% of construction's workforce, down slightly from the 2016 record-high share of 24.4%
• Average hourly wages in the overall construction industry have increased 5.4% over the last year, with average wage levels exceeding national private sector averages
• Women make up a growing share of construction's workforce, reaching 10.9% in 2022. This is a noticeable increase from 9.1% in 2017 and just a nudge below the record-high share of 11% recorded in 2021
Want to learn more about attracting qualified workers to the residential remodeling industry? You might want to attend an informal—and insightful—education session at the Remodeling Central during the NAHB International Builders’ Show in Las Vegas. The session, “Finding a New Generation of Craftspeople: Looking Beyond Traditional Candidates,” will take place Wednesday, Feb. 28, 4:15 - 4:45 p.m. in the Remodeling Central, LVCC West 212.
The Remodeling Central will be open all three days of the Builders’ Show, Feb. 27-29, 2024. Register today to take advantage of important education and networking opportunities.