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Where Have All the Construction Workers Gone?

by Peter Thomas Ricci

Although the construction industry seems to be rebounding, builders are having a tough time finding the right workers for the available jobs.

Few areas of the economy were more affected by the economic downturn than the construction industry. Through much of 2008 and 2009, block after block of newly-built single-family homes lay deserted, while inner-city high rises stood alone, empty, and in many cases, half-finished, with the structures’ frames exposed.

2012, though, found home construction roaring back to life. According to the Census Bureau, residential construction spending jumped 16.8 percent in 2012 over 2011, while housing starts closed out the year at their highest level since 2008. Yet, even though construction firms have stepped up their hiring to meet this new demand – indeed, the 28,000 new construction jobs in January accounted for nearly a fifth of all the jobs created that month – construction payrolls, according to USA Today, are unchanged from 2010 at 5.5 million.

The reason? Builders cannot find the right workers for the jobs at hand.

Demand Outstripping Supply

The construction industry, it would seem, would be the least likely of all the economy’s arenas to experience a lacking supply of workers; after all, the industry has shed an incredible 2.2 million jobs since 2007, so wouldn’t those workers be chomping at the bit to resume their careers? Well, not exactly, and for three main reasons:

1. Many of those 2.2 million workers re-calibrated their skill sets following the downturn, and became truck drivers, factory workers or, among the more adventurous, roughnecks in the nation’s thriving oil and natural gas industries in Texas and South Dakota.

2. Still others retired, and many of the migrant workers that previously flocked to construction returned to their native countries during the downturn and have yet to return.

3. And finally, there are fewer and fewer high school graduates entering construction, with more and more trending towards college and training for careers in engineering and technology.

All of this has left homebuilders in a bit of a bind. Rents are on the rise, increasing 4.2 percent in 2012 alone, according to Zillow, and existing-home prices are rising in a similarly strong manner, with housing inventory at an eight-year low; in short, it’s an ideal market for new construction properties. Will homebuilders find the workers to service that need?

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