Confidence Dips as Builders Worry About Labor
Mixed economic indicators signal uncertainty in the home-building industry.
Single-family housing starts are rising, albeit slowly, and one forecaster sees the economy improving into 2017 (with some caveats). On the flip side, a survey of builder attitudes that’s been running for 30 years shows confidence dipping since the start of the new year, and worries about cost and availability of labor at the top of builders’ minds.
Positive Overall U.S. Economy For 1H 2017?
According to the recently updated Decision Analyst U.S. Economic Index, January 2017 saw a 7% boost over January 2016. And since the Index is a leading economic indicator looking at the overall U.S. economy, this looks like good news for the first half of the year, at least — if events in Washington cooperate. “The overall trend of the U.S. Economic Index over the past few months suggests that 2017 will likely get off to a positive start,” said Jerry W. Thomas, President/CEO of Decision Analyst. “However, the change of political power in Washington carries with it risks of economic distractions and economic turmoil.”
The Decision Analyst Economic Index is based on a monthly online survey of several thousand households balanced by gender, age, and geography. Read the full report here.
Builders Are Concerned … Mostly About Labor
The NAHB has been surveying builders for 30 years, asking about their confidence levels in general, and asking specific questions on topics of interest. The latest confidence report, released today, reveals that builder confidence has dipped downward for the second consecutive month. This may not be cause for alarm, considering that confidence is still higher than average over recent years. The NAHB press release spins the news as a return to normalcy; the headline is “Builder Confidence Continues to Settle Back to Sustainable Levels in February.”
But the trade group also polls builders on their biggest worries, and in the January 2017 report, the top concern among builders is still “Labor Cost/Availability.” In 2016, 78% of builders polled said that they had grappled with the problem, and 82% say that they expect to do so in 2017.
The NAHB post on the results says, “Topping the list of problems builders faced in 2016 and expect to face in 2017 is the Cost/Availability of Labor, a significant issue for 78% of builders in 2016 and one that has significantly grown in importance since 2011. That year, 13% of builders rated labor as a significant problem, followed by 30% in 2012, 53% in 2013, 61% in 2014 and 71% in 2015.”
The graph at the top of this page is taken from that report, which you can click here to read.
And there is real data to back up those builder worries. Looking at the latest data from the Bureau of Labor Statistics, home builder and remodeler employment continues to grow quickly and hiring is increasing. Check out the NAHB’s take on the data here.
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LOL! My bro has been a framer in Kansas City MO for 30 years, and he can't find work at $20 an hour because companies are hiring illegals to frame for $10/hr. The contractors who are hiring these guys should have their licenses revoked.
Americans aren't bothering to learn to build because they can't afford to work that cheap! If you start running off the illegals and paying what skilled labor is actually worth you could put American citizens to work. What a freaking concept! Of course you couldn't afford to buy your wife a new BMW SUV every couple of years, might that be worth saving American workers?
Notice the incline of worry over lack of qualified labor increasing yearly from 2011 on. Think it has anything to do with the housing crash in 2009. Many that invested much time in apprenticeships that were qualified, were kept on payroll, while any "non essential workers" were out of a job. I personally know that when that happened and employers had an incentive to push the remaining trade workers to now work alone and in unsafe conditions, many were injured, some with career ending type injuries. OSHA safety regulations were gutted in 2000, construction is the most dangerous job in America. Some greedy employers exploited the economic situation and in turn when the workers got hurt, they never returned. Workers compensation is about shielding the employer from liability, while restricting necessary care to those it was supposed to. I completely understand a young person being reluctant to enter the construction trades in today's atmosphere. Unless you own the business, it is just too much risk for a career choice anymore.Get the safety issues corrected and the scum bag greed addict type business owners out and you may see some renewed interest in the trades from the younger generation.
HVAC GUY. LOL. Really, you think that's the problem?