Immigration and the trades
Immigration policy is a “wild card” for the construction industry, according to National Association of Home Builders Chief Economist Robert Deitz.
There are about 200,000 open positions in the construction industry, he said. And houses and condos aren’t going up as fast as they were in 2022—single-family and multi-family construction are both down about 20 percent.
“It's a little bit easier to find crews now than it was say two years ago,” Deitz said, during an economic forecast delivered at the recent International Builders’ Show. “However, the wild card to that of course is what's the impact on immigration policy.”
Deitz offered a breakdown of the occupations in the construction sector that are particularly dependent on non-native born workers:
When looking at the overall construction labor force, about one-third was not born in the U.S., Deitz said. Bur for specialized occupations such as plasterers, stonemasons, tile installers, painters and roofers—"these shares are really quite high.”
The share of immigrant labor varies significantly by region. Not surprisingly, traditional gateway areas in the United States such as New York, New Jersey, Florida, Texas, California and Nevada have particularly high shares — from 36 percent in Nevada to 40 percent in Texas and California.
Several Midwestern states fall in the single-digit percent zone, including just 1 percent in North Dakota, according to NAHB estimates.
“So there's a lot of geographic variation in terms of the at risk of the construction labor market if we were to see a real emphasis on mass deportation,” Dietz said.
The NAHB stats did not take into account the status of the construction workers as documented or undocumented.
In contrast, a recent webinar from John Burns Research and Consulting included a slide with the headline: “High shares of drywall installers, roofers, painters and other construction workers are undocumented.”
The JBREC webinar (“A New Landscape: Prices, Products and the President’s Executive Orders”) sourced the Burning Glass Institute to offer stats showing that the estimated undocumented immigrant share of drywall/ceiling tile installers was 50 percent in the total United States, and 66 percent in southern border states of California, Arizona, New Mexico and Texas.
For roofers, the breakdown was 37 percent across the U.S., and 49 percent in the border states.
Matt Saunders, senior vice president of building products research for JBREC, pointed to a January earnings call commentary from Pulte Homes: “In terms of impacts to the broader labor force, even just beyond construction labor to the extent that there are deportation activities, there’s no question there will be less labor available, and that will have an impact all wage rates and we’ll certainly have to deal with that as that becomes more clear.”
Also from January, a qualified remodeler survey found that around 33 percent of U.S. design build firms said that rising deportations will impact their business, and they cited the expectation of longer cycle times, project delays and higher labor costs.
“The implication of what's happening with deportations and these trades over indexing to undocumented workers is that we should expect continued wage growth in 2025,” Saunders said.
