Photos: NAHB

Having just weathered an economic tsunami, the home building industry seems to be in the calm before a storm of another type: labor shortages. However, unlike the widespread havoc the housing bust wreaked on the industry as a whole, the shortages likely to be caused by the industry’s recovery may be more selective, both by region and area of expertise.

But first, the calm. According to a recent survey by the National Association of Home Builders (NAHB) (to which 481 single-family home builders responded), 70% of builders are not currently experiencing any shortages of labor in the 12 trade areas inquired about, and 80% of builders indicated there is no shortage in nine of those areas.

When questioned about subcontractors specifically for the same 12 trade areas, reports of shortages increased, but remained low by historical standards. The NAHB has collected data on labor availability six times over the last 16 years, and in June 2012, subcontractor shortages were the lowest seen since the inception of the series. In half of the trade categories, 80% of builders had not experienced any shortage of sub labor, and 65% of builders had seen no shortage in any subcontractor category.

But fears are brewing. "I’ve been traveling for six months, and what I consistently hear everywhere is concern that depending on how fast the market picks up, there’s a fear of the lack of skilled tradespeople," John Courson—president and CEO of the Home Builders Institute (HBI), the workforce development arm of the NAHB—told Builder. "A lot of trades have left the business, and they’ve moved on and are doing something else."

Already, some troubling trends are appearing. Among survey responders, 25% reported some level of labor shortage for framing labor; 24% reported shortages of rough carpenters; and 22% have encountered shortages of finish carpenters. When asked specifically about subcontractors, 29% reported shortages of framing crews.

Regional trends are also playing into availability. For example, in the Northeast, 18% of respondents had encountered shortages of framing labor, but that number grew to 28% in the Midwest, 32% in the South, and 34% in the West.

Coming off of the worst year on record for housing starts, the NAHB projects that single-family starts will grow to 514,000 in 2012, from 429,000 in 2011; and then rise to 751,000 in 2013. And the builders surveyed apparently anticipate improvement as well, as 41% of respondents said they plan to hire or contract more skilled labor in the coming 12 months. That percentage grew to 56% among builders who started 100 or more units in 2011.

But in addition to concerns about being able to find labor at all, more than half of the builder respondents expressed concern that their current skilled trades may need more training. "A lot of the workforce is not at a skill level that builders need now," Courson said. "In the past, they’ve had the luxury to being able to provide on-the-job training. Now they want folks who are job ready." That change, he says, has come as the result of an increased focus on green building, more use of technology, and increased need for efficiency to turn a profit. "Builders need to be able to produce homes with a smaller workforce, and they don’t have the means to do training," he said.

Earlier this year, HBI predicted that there would be 113,000 new trade hires during 2012, a 17% increase from last year. So far, Courson says that percentage has proved accurate. Training programs such as the HBI’s, which works with 13,000 students per year, as well as training programs offered by unions and nonprofits, are working to fill the void. However, some of that trained talent will be siphoned off by remodeling companies, Courson warns, "as more people find themselves underwater on their mortgages and decide to stay put."

Claire Easley is a senior editor at Builder.

Learn more about markets featured in this article: Greenville, SC.