HBI report highlights labor challenges

Estimates indicate 723,000 construction hires per year are required to meet market demand.

7/24/2023

HBI's goal is to build the next generation of skilled tradespeople.

Residential construction, housing inventory growth, and affordability are all being impacted by a lack of skilled labor, according to a new report from the Home Builders Insitute (HBI).

The Construction Labor Market Report (Spring 2023) indicates that while a softening of the housing market in recent months has lessened the issue, an upswing predicted for 2024 will increase the demand for skilled workers.

Additionally, skilled construction workers will be needed to reduce the nation's housing deficit during the second part of this decade. The housing shortfall totals about 1.5 million homes, according to the National Association of Home Builders (NAHB).

In recent months the number of open, unfilled jobs in the overall construction industry totaled 300,000 to 400,000 positions, although this is trending lower as home building activity slows on higher interest rates. Indeed, more homes are being completed than starting construction.d

Key findings in the report include:

Demand for construction workers is weakening due to the housing downturn, but the year-over year gains remain solid, with 46,300 net residential construction jobs added over the last 12 months.
However, the soft patch for housing has reduced the recent monthly average employment gain for home builders and remodelers to just 700 jobs a month.
Women make up a growing share of construction employment, reaching a new record high of 11% in 2021, a 1.9% percentage point gain since 2017.
Construction payroll employment currently totals 7.9 million. o Residential construction represents 3.2 million of this total.
The number of open construction sector jobs currently averages between 300,000 to 400,000 each month, although this total is now slowing.
Construction employment is broad-based across the nation.
Self-employment in construction is currently 23% of the labor force, down from 26% in 2010.
Immigrant workers now account for 24% of the construction workforce, down slightly from the 2016 record-high share of 24.4%.
Hispanics make up close to one-third of the construction labor force (31.5%), a new record high.

The NAHB estimates that construction worker growth of 723,000 per year is required to meet market demand.

This estimate is determined by estimating the required net growth in employment due to construction expansion plus workers required to replace individuals who leave the sector permanently, the HBI said.

The estimate also reflects a need for more than 60,000 adjusted net hires per month. Over the course of 2024-2026, this total represents a need for an additional 2.17 million adjusted net hires for construction.

Read the full Construction Labor Market Report here.

HBI is the nation’s leading nonprofit provider of trade skills training and education for the building industry. The institute’s goal is to build the next generation of skilled tradespeople.