HBI: Skilled Labor Shortage at ‘Crisis Level’
Date Posted: November 5, 2021
Posted In: Discussion, News,
From Builder: The number of construction workers needed to keep up with demand is approximately 740,000 new workers per year for the next three years, according to a report from the Home Builders Institute (HBI). The HBI said a lack of skilled labor is a key limiting factor for improving both housing inventory and affordability.
“The construction industry needs more than 61,000 new hires every month if we are to keep up with both industry growth and the loss of workers either through retirement or simply leaving the sector for good,” HBI president and CEO Ed Brady said in a news release. “From 2022 through 2024, this total represents a need for an additional 2.2 million new hires for construction.”
The HBI Fall 2021 Construction Labor Market Report provides a more grim forecast for the need for skilled labor than the organization’s market report released in April 2021. In the spring report, the HBI estimated the construction industry was short 200,000 workers. Employment estimates are generated based on analysis of Bureau of Labor Statistics data by the NAHB.
According to the HBI, the number of open construction sector jobs averages between 300,000 and 400,000 each month. This is compounded by an aging workforce in the industry. The median age of construction workers is 41, and the share of construction workers aged 25 to 54 decreased to 69% from 72.2% between 2015 and 2019.
“The construction worker shortage has reached a crisis level,” Brady said. “The situation will become more challenging in the coming year when other industries rebound and offer competitive wages and benefits to prospective employees.”
Despite the worker shortage, construction wages compare favorably with most jobs in the U.S. economy. Half of payroll workers in construction earn more than $50,460 annually, and the top 25% make at least $71,000, according to the HBI. In comparison, the U.S. median wage is $49,150, with the top 25% making at least $67,410. The share of women in the construction industry has increased, though, growing from 10.3% in 2019 to 10.9% in 2020.
“We need to build the next generation of skilled tradespeople in construction,” Brady said. “One of our most important tasks as an industry is to work with parents, educators, and students, as early as the middle school years, to demonstrate that young people can have the promise of great jobs and careers in the trades.”