A vast influx of new workers is needed to meet demand, according to the Home Builders Institute.

Housing inventory and affordability will continue to be weakened by the shortage of skilled construction labor, according to a new report by the Home Builders Institute (HBI).

The estimations contained in the HBI Fall 2021 Construction Labor Market Report are based on a new analysis of Bureau of Labor Statistics data by the National Association of Home Builders (NAHB). The number of new workers needed yearly to keep up with demand is estimated to be 740,000 each over the next three years.

While exacerbated by the pandemic, the shortage of construction workers can be traced back to the Great Recession of 2008-09.

“The industry lost a million and a half workers during that time,” Robert Dietz, chief economist for Washington, D.C.-based NAHB. “It’s added workers back during what was a long recovery in home construction.

“But we simply have not added as many workers as needed and the workforce has aged. A key challenge for the home building and non-residential construction industry is recruiting, training and retaining workers.”

The implications are as stark for multifamily as any other sector. Approximately 400,000 to 500,000 apartments need to be built yearly to keep pace with household formation growth.

“Doing so requires a workforce of about a half million,” Dietz said. “We need to recruit, train and retain workers in the multifamily space to meet this goal.”

MARKET OVERVIEW

The HBI report offers a number of other key findings. The number of open construction sector positions averages between 300,000 and 400,000 monthly. Residential construction represents about 3.1 million of the total construction employment of 7.42 million. Construction sector self-employment tallies 22 percent of today’s labor force, a decrease from the 26 percent in 2010. Women comprise a modestly growing share of construction employment, up from 10.3 percent in 2019 to 10.9 percent in 2020.

Asked whether some projects will be delayed because there are not enough trades to go around in some markets, Dietz responded that this phenomenon has indeed occurred in recent years.