Builders finding success in shoring up their work crews

The prevailing trend the real estate industry is experiencing today is easy to explain but more complicated to resolve: perpetually rising home prices. According to the most recent statistics from the National Association of Realtors, the typical property in the U.S. in January sold for approximately $247,500, which represents the 83rd straight month in which the median price among all housing types rose on a year-over-year basis.

How to push home values into more affordable territory? That is the question. Part of the answer is found in increasing inventory, a classic manifestation of supply and demand economics. The problem for years now is builders have largely been short-handed, without the level of qualified help they need to get ahead of Americans' long-held homeowning intentions.

Slowly but surely, however, developers are making some substantial inroads toward shoring up skilled labor shortages.

Construction employment improves in majority of MSAs
According to newly released analysis of monthly Labor Department statistics by the Associated General Contractors of America, 273 in 358 metropolitan statistical areas nationwide saw employment in the construction sector rise in December 2018 compared to 12 months earlier. That means more than three-quarters – 76 percent – of the MSAs witnessed construction job growth on a year-over-year basis. Hiring fell in just 37 metro areas and held steady in 48.

AGC Chief Economist Ken Simonson said jobs data that rounded out 2018 was very encouraging and sets the stage nicely for 2019, although there's plenty of room for improvement.

"Construction employment continued to expand in most parts of the country in 2018 as demand for many types of construction projects grew," Simonson explained. "As welcome as the job gains were, many firms would likely have added even more workers if labor market conditions were not so tight."

Full employment forcing builders to improvise
Indeed, the U.S economy is performing well enough that relatively few people these days are out of work. The jobless rate hovered right around 4 percent all throughout last year and has continued to stay low through the first two months of 2019. This has forced construction firms to reevaluate how they recruit, leading them to offer up various incentive packages that encourage those already employed to start working for them, and for contracting veterans who've retired to perhaps reenter the job market. It seems that some of their strategies have worked.

As Simonson alluded to, however, builders have a ways to go yet to get back in the black, particularly when it comes to finding highly experienced personnel. Nearly 80 percent of respondents in a separate AGC survey said they intend to continue their hiring binge in 2019. But 3 in 4, on average, say they're worried about not being able to locate individuals with the appropriate qualifications for the tasks at hand.

The course of a year can feel like a lifetime for residential construction professionals who own their own firm. Aside from finding the right people to hire – and, in some cases, fire – there are contracts to sign, suppliers to compensate and compliance issues to address. Hudspeth Law Firm is your one-stop construction law headquarters. Contact us for practical experience you can trust.

Categorised in: Business Law, Contracts & Transactions

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