All Hired Out: As the Economy Revives, Skilled Labor Supply Is a New Worry

As the economy revives, the labor supply is a new worry

This fall brought signs of life to a U.S. construction industry that lost more than a million jobs in the recession. New-home starts surged 15% in September, and new-home permits were up a whopping 45%, year over year. And Harvard’s Joint Center for Housing Studies projects double-digit increases in remodeling spending for the first two quarters of 2013.

But if the jobs come back, will the workers come back to fill them? Or will remodelers have to fight with builders over a shrunken pool of skilled labor?

Nationally, it’s a future problem. A June National Association of Home Builders survey showed most builders reporting no current labor shortage, and subcontractor shortages were the lowest the survey had found in eight samplings over 16 years.

But in one market — Houston — that future is now. Fueled by oil-patch dollars, Houston entered the recession late and is already pulling out of it. And this year, Houston’s labor shortage is dire.

In a taped interview with Houston’s Construction Citizen website, Houston Home Builders Association officer Kathryn “Toy” Wood said, “During the slow times, there was an out-migration of the people who did the work. People from Mexico, from other places south of the border, they went back home.” Houston remodeler Leslie King said in October, “I’m sitting here frantically trying to get my painter to bring in more painters. I don’t have enough painters. I don’t have enough trim carpenters.”

Bill Shaw, another Houston remodeler, says subcontractors who downsized are reluctant to staff up again. “Everybody is waiting to see what’s going to happen,” he says. “Subcontractors are not hiring new people. They’re trying to make do with the workforce they have, and it’s not cutting it.”

Going National?

How soon could this turn into a national problem? That depends on the pace of recovery. For now, it’s hit-or-miss. As an officer in NAHB Remodelers, Shaw says, “I’m hearing from remodelers who are going to have a pretty good 2012, and I’m hearing from others in other parts of the country who are still struggling to stay alive. It’s not just region-specific — it’s city-specific, and sometimes it depends on which area in a particular city or county you work in.”

At the Remodeling Show in Baltimore this October, Shaw heard the full range of stories. “Those who are doing well this year are having the same labor issues that I am having,” he says. “At the table, there’s a guy who just wants to talk about the lack of qualified people to work. But sitting right next to him is a guy who’s in his fourth or fifth year of the recession, and he’s not seeing the light of day.”

—Ted Cushman, a regular REMODELING blogger, writes the Coastal Connection newsletter and frequently contributes to REMODELING’s sister publication THE JOURNAL OF LIGHT CONSTRUCTION.