In Central Florida last week, a big national builder senior executive fretted about a division’s ability to meet its divisional year-end goal of delivering 200-plus homes to new owners before New Year’s Eve.
In August, when the goal-line and the imperative were set, the objective seemed like a push, but a reasonable one.
Then came the storms.
Now, the siren song of higher per-hour wages on insurance-financed restoration and repair work among skilled workers and trades who tend toward transient opportunity–namely, roofers and dry wall installers–has begun casting a powerful spell across job sites near you and me.
“We’ve put it out there that if anyone on our crews leaves to go take insurance work in Houston or one of the other affected regions, we won’t take them back on our jobs,” this executive told us. “We’ve had times where a van will pull up to one of our sites, and people literally stop working on the roofs, hop in the van, and we don’t see them again. In fact, though, they can spend the next year or more doing insurance work, and we probably would take them back when they show up again in our market. That’s how desperate we are for what they do.”
The full effects of insurance restoration and repair opportunities have not become a factor yet, but talk of them is already hitting a vibrational level that’s adding worry to divisional year-end goals in many markets.
Meanwhile, in a bit of a head-fake, net unfilled jobs in construction fell a notch in September, as new job openings slipped a titch and hiring increased on trend for the period.
National Association of Home Builders chief economist Rob Dietz checks in here with the latest Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) here, with the following macro conclusion:
Overall, the labor market for construction workers remains tight as it continues to expand. As single-family housing starts continue to increase and rebuilding efforts in Texas and Florida proceed, more workers will be needed in the residential construction sector.
Mark Fleming, senior VP and chief economist at First American, notes that, per US Census/BLS tracking of residential construction, the total gain of 767,000 jobs is up merely 2.3% over the same time period in 2016. Further, he observes, new residential production reflects the weight of labor capacity constraint already, given that total construction employment is probably three-quarters of a million people less than a decade ago:
Based on the current level of residential construction jobs, the number of housing starts for October, to be released later this month, the three month moving average for residential (single and multi-family) housing starts should remain above 1.1 million units, but will likely remain well below the peak reached earlier this year. Housing starts continue to face a labor shortage challenge and the gap between household formation and home building will remain.
Housing’s labor and talent challenges–and how to meet them head-on–will be a central theme of our upcoming Hive event, Dec. 6 and 7, in Los Angeles, at the Intercontinental Hotel. From keynotes by tech start-up strategists AOL founder Steve Case and Airbnb co-founder Chip Conley, to our focus on operational topics like the role of data, the future of automation and offsite production, the development of healthy, safe, attainable, and sustainable products and materials, the sourcing of new streams of capital finance, and the urgent need to design and engineer resiliency into our homes and communities.
Space is getting tight at Hive, so register now by clicking here.
