While the price of lumber continues to climb, an equally pressing challenge is throwing a wet blanket on the new construction parade: a labor squeeze.
The return of the single-family market is one factor driving up the price of labor. And with 299,000 multifamily starts slated for this year and another 317,000 in 2014, according to the National Association of Home Builders, good multifamily contractors will be able to pick and choose the jobs they want.
If single-family starts continue to increase on top of that, the price squeeze for labor will only tighten.
“You used to be able to get as many framers as you wanted,” says Marc Padgett, a principal with Summit Contracting Group, a Jacksonville, Fla.–based general contractor. “With one phone call, you got 100 guys. Now, you have to make 50 calls to get 25 guys.”
Framers aren’t the only trade whose costs are rising. “Many multifamily subs went out of business during the recession,” says John Rooney, project director at Doster Construction Co., a GC in Birmingham, Ala. “This has led to fewer subs bidding on more jobs.”
When the state of Alabama passed a tough immigration law in 2011, Rooney fielded a lot of calls from nervous developers. They were concerned the law would make it difficult to find contractors to build apartments in the state.
A couple of years later, apartments are still going up in Alabama, but labor is hard to find there—and around the country. In fact, with an unemployment rate in the construction industry hovering at around 15 percent, it’s hard to believe labor is an issue anywhere.
But talk to developers and contractors who are scrounging for framers (and other trades), and you’ll quickly see the need. Economic realities pushed many framers back to their countries of origin, into retirement a year or two early, or into other industries. The increasing demand may continue unabated. Arlington, Va.–based Associated General Contractors of America (AGC) estimates that the industry could need 350,000 workers this year alone.
Unfortunately, Brian Turmail, executive director of public affairs at AGC, doesn’t see the new immigration proposal from the Senate’s Gang of Eight fixing this issue. That’s because it caps the number of construction workers allowed at 14,000.
“We think caps in immigration proposals are not rational,” Turmail says. “They could do more damage to an industry that will soon be looking for workers, and they could actually impede the recovery of the construction industry.”
But Turmail admits that immigration policy alone won’t just magically open up the door for new construction labor. He also blames a failing vocational education system that has left the industry bereft of skilled workers, and a construction industry that doesn’t do enough to promote itself.
“A lot of folks discount the value of a construction job because you’re working outside when it’s cold and you’re working outside when it’s raining, and you’re working outside when it’s hot,” Turmail says. “We have not done the best job of making construction jobs sound appealing when all we’ve done in the last few years is scream about how many jobs we’ve lost.”