Homebuilding is surging, but job growth isn’t

Richard Vap, owner of South Valley Drywall in Littleton, Colo., says he is having trouble hiring enough qualified people.

Ed Andrieski

The resurgent U.S. housing market has sent builders calling again for Richard Vap, who owns a drywall installation company. Vap would love to help if he could hire enough qualified people.

“There is a shortage of manpower,” says Vap, owner of South Valley Drywall in Littleton, Colo. “We’re probably only hiring about 75 or 80 percent of what we actually need.”

U.S. builders and the subcontractors they depend on are struggling to hire fast enough to meet demand for new homes.

In the meantime, workers in the right locations with the right skills are commanding higher pay.

The shortage of labor ranges across occupations from construction superintendents to painters, cabinet makers and drywallers. The National Association of Home Builders says its members have complained of too few framers, roofers, plumbers and carpenters. The shortage is most acute in areas where demand for new homes has recovered the fastest.

The problem results largely from an exodus of workers after the housing bubble burst. Experienced employees lost jobs. And many found new work and aren’t eager to come back. Hispanic immigrants, largely from Mexico, were among those who left the industry and, in some cases, the United States.

A shortage of labor in a well-paying industry might seem incongruous in an economy stuck with a still-high 7.5 percent unemployment rate. But it reflects just how many former skilled construction workers have moved on.

In 2006, when the boom peaked, 3.4 million people worked in the industry. By 2011, the figure had bottomed at about 2 million. As of last month, about 2.1 million people were employed in residential construction.

Jobs in the industry did rise 4.1 percent in April from a year earlier, faster than overall U.S. job growth. But they’d have to surge 24 percent more to reach their 2002 level, “the last time the market was normal,” says David Crowe, chief economist for the National Association of Home Builders.

For now, the industry is building faster than it’s hiring. Crowe’s group says nearly half its members who responded to a survey in March said the scarcity has led to project delays.