The number of construction workers needed to keep up with demand within the sector is 740,000 per year, according to a new report from the Home Builders Institute (HBI). The organization says the “severe shortage” of construction workers continues to weaken both housing supply and affordability.
“The lack of skilled construction labor is a major challenge for the nation’s home builders who are struggling to expand housing inventory and improve affordability,” says HBI CEO Ed Brady. “More training means more pre-apprentice talent placed on jobsites. More and better trained workers will result in greater productivity. Greater productivity will not only mean a boost to the housing supply, but also increase home builders’ ability to pay workers more, as the nationwide competition for nearly all categories of labor continues to be stiff.”
According to the Spring 2022 HBI Construction Labor Market Report, compiled for the HBI by the NAHB Economics Department, the demand for construction workers remains “strong,” with 103,000 net residential construction jobs added over the last 12 months. However, the number of open, unfilled jobs in the overall construction industry totals between 300,000 and 400,000 positions. The HBI estimates the industry will need more than 61,000 net hires a month to fill vacant positions, adjust for the projected growth of the construction industry, and replace the individuals estimated to leave the sector permanently. According to the report, the median age of construction workers is 41; however, due to aging trends, the share of construction workers aged 25 to 54 decreased to 69% from 72.2% from 2015 to 2019.
From 2022 to 2024, the HBI estimates the industry needs an additional 2.2 million net hires. “That is a skilled labor shortage at crisis level," Brady added.
According to the HBI, the construction industry can “significantly mitigate” the labor shortage by working closely with unions to train and place thousands more in the skilled trades. Additionally, Brady says closer cooperation between the construction industry and unions can be beneficial to combat the labor shortage.
“We are in a new era of need and opportunity that requires serious collaboration,” Brady says. “The building industry, labor, and the public and nonprofit sectors must work together to create good-paying jobs for a new generation of skilled workers in construction.”
Despite the shortage, construction wages compare favorably with most jobs in the economy. Half of payroll workers in construction earn more than $49,070 annually, compared with the U.S. median wage of $45,760. The top quartile of construction workers earn at least $75,820; the top quartile of workers in the overall economy makes at least $68,590.
Brady says the industry also needs to “capture the imagination” of more middle school and high school students to help create a younger, more diverse construction workforce.
According to the HBI, women made up 10.9% of the total construction workforce in 2020, an increase from 10.3% in 2019. Immigrant workers account for 24% of the construction workforce, down from the record high share of 24.4% in 2016.
“As a nation, we need to build the next generation of skilled tradespeople,” Brady says. “That means recruiting more women. It means training and placing minority, lower-income, and opportunity youth for good-paying jobs as an important way to fight against social inequality.”
The HBI, based in Washington, D.C., trains skilled workers for the building industry. The organization provides pre-apprenticeship and advanced training, certification programs, assistance in obtaining apprenticeships, and job placement services for students. The HBI releases its Construction Labor Market Report on a biannual basis in the spring and fall.
