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April 2022 #14273 Page #96
The Skilled Labor Shortage is Pushing Building Industries Toward a Tipping Point
E
ven before the coronavirus pushed it into the stratosphere – setting record new highs – the housing market was experiencing one of the largest booms in the country’s history. From 2012 until the start of By Bill Darcy, the COVID-19 pandemic, the U.S. housing market had risen more than 50%, Chief Executive Office, continuing to drive up the values of homes across the country. Furthermore, it National Kitchen & Bath is not only the housing market that is experiencing unprecedented growth, but Association also the renovation and remodeling market. Due to pent-up demand, there is a shift towards bigger, more expensive and professional-heavy interior remodels and total spending is forecast to increase 19% in 2021: from $141 billion to $167 billion. While industries related to housing are currently booming as a result, there are underlying issues that will begin to impact the viability of the industry’s ability to sustain long-term growth – the most critical of which being labor. While labor shortages are not a new phenomenon nor is it contained strictly to the trade community, it is clear from ongoing labor reports that there is a need across many sectors. Given the fact that nearly every area of the economy is facing this challenge, competition will only increase when various industries all try to recruit and retain the same talent. With more tradespeople retiring than are entering, industries requiring skilled labor are at a crossroads, running the risk of not being able to attract enough talent to keep up with the growing demand for services. Therefore, from construction to remodeling, plumbing to electric, industries across the spectrum must come together to assess the problem, develop coordinated strategies and implement grassroots efforts to stop the negative momentum and resuscitate good-paying trade careers within the United States.
The Health of Building Industries Affects the Overall Economy A shortage of skilled building trade professionals has a broader impact on the health of the economy and the housing market. For example, without skilled tradesmen, new home builds and interior remodels are going to take longer to complete. According to the latest Kitchen and Bath Market Outlook from NKBA, new housing starts from H2 2020 are only now beginning to turn into kitchen and bath orders. While this is contributing to third quarter growth within the Kitchen and Bath industry, the lack of labor will continue to impact capacity and keep new home construction completion times closer to 12 months, rather than the traditional 5–11 months, resulting in lower inventories and higher housing prices. Additionally, as interest rates are plummeting, more institutional investors are entering the single-family rental arena and with families leaving crowded cities, the market is falling into an uneven level of supply and demand – pushing the prices of homes higher and pricing out many Americans along the way. With communities across the U.S. already facing a housing affordability crisis, unless the building industries increase the availability of homes to balance supply and demand, some consumers will continue to get squeezed out of the market. PHONE: 800-289-5627
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