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Catherine Colbert

Competitive Construction Labor Market Challenges Homebuilders

by Catherine Colbert | Dun & Bradstreet Editor

July 2, 2015 | No Comments »

Construction-contractor-home_1100pxCompanies involved in constructing and renovating residential buildings are having a harder time holding onto their talented trades as competition for labor increases in the nation’s most active regions for residential building.

According to First Research, the $335 billion residential construction contracting industry comprises about 150,000 establishments, some of which are angling for the same seasoned crews of residential construction contractors. The industry includes builders of both single-family and multifamily housing and residential remodelers.

Homebuilders in areas with rising housing starts are even reporting some poaching.

They’re seeing rivals approach laborers with offers as they work at job sites. In Southern California, the scarcity of labor has spurred some desperate general contractors to fight over drywall crews by offering them signing bonuses and raises for exclusivity, according to Builder Online.

Besides drywall, other hard-to-fill trades that are harder to retain include finish carpentry, plumbing, electrical, roofing, and concrete.

Keeping subcontractor crews intact on residential building sites will be a growing problem during the next year or two. Housing starts are forecast to expand 16% in 2015 and 14% in 2016, according to MAPI Foundation.

US builders are clued in to the hypercompetitive environment. In a Metrostudy Builder Labor Supply report, 70% of the nation’s biggest builders and general contractors cited labor as the top challenge for 2015. Labor issues have also increased homebuilders’ expenses and delivery times.

Until the housing market begins to cool, retaining trades will continue to be a concern for residential construction contractors.

Industry Impact — Residential construction contractors may need to boost pay or offer other incentives to attract laborers in hard-to-fill trades.

Tracking the moves of consumer products makers since 2003, Colbert is a company insights writer and blogger. Before covering companies, she spent ample time in magazine publishing, technical writing, ad copywriting, medical writing, and marketing. Follow her on Twitter.

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