Labor and Supply Shortages Continue to Plague Construction Industry

More than three-quarters of single-family home builders reported a shortage of labor, while single-family production dropped in October, as the lack of supply and costs of materials continues to hurt the industry.

According to the National Association of Home Builders, 76% of builders reported there was a direct labor shortage. The survey asked about 16 trades essential to the industry, with 86% reporting a shortage of framing crews, another 86% reported rough carpenters were in low supply and 85% said finished carpenters are hard to find. More than three-quarters reported a shortage of plumbers, as well as bricklayers and masons and 76% said concrete workers as well as electricians are difficult to find as well. Additionally, builders reported a shortage of HVAC workers, painters, drywall installation workers, flooring installers, landscaping workers, roofers, excavators, weatherization workers and building maintenance managers. Builders also reported difficulty finding all of these tradespeople to work as subcontractors as well, with 81% reporting a shortage of subs. Overall, this is the highest percentage reported by builders of a shortage of tradespeople, both directly employed and subcontracted, since the survey began eight years ago.

Not surprisingly, single-family home starts dropped 0.7% from September, representing 1.52 million units. The report also found an increase of 43.4% of homes that have been authorized, but have not started construction, representing 152,000 homes. Not only is there supply issues, with builders struggling to find an adequate amount, NAHB also found that building materials have risen 12.2% year to year and are up 0.8% from September. The price of all supplies, including energy, have grown 14.5% thus far in 2021.