By Lucia Mutikani
WASHINGTON, June 19 (Reuters) – Where have all the carpenters gone? Home builders across the United States are scratching their heads for an answer as they struggle to assemble crews to keep up with growing demand.
In some parts of the country, the shortage of skilled carpenters – especially framers – is so bad that builders cannot get projects off the ground and it is taking as much as two months longer than normal to complete a project.
‘Right now I have framing material sitting on the job site with the foundation on the ground,’ said Stephen Paul, executive vice president at Mid-Atlantic Builders in Rockville, Maryland. ‘It’s been sitting there a week because I have not been able to get a framer to start the house.’
According to a National Association of Home Builders survey published last month, 48 percent of single-family home builders could not find framing crews in the first three months of this year, and builders in all four regions struggled. In the middle of last year, that figure stood at just 30 percent.
The demand for labor has been driven by the decisive recovery the housing sector is finally mounting.
According to industry figures released on Monday, a majority of U.S. homebuilders view conditions for new construction as favorable for the first time since the housing crisis began seven years ago, and home prices have been climbing.
To be sure, it’s hard to explain a labor shortage when unemployment in the sector is over 10 percent, and some argue that builders just need to pay more.
Still, a labor shortage and pricey materials may hold back new home construction and help push prices higher as demand outstrips supply, realtors and economists say.
Government data on Tuesday showed housing starts rose less than expected in May, an indication that supply constraints might be starting to impact on home building. Builders say costs have risen between 10 percent and 15 percent over the last year.
Although the nation’s unemployment rate stands at a lofty 7.6 percent, and is much higher in construction, builders say that is not translating into the availability of framers – the carpenters with mid-level skills who create the skeletal wooden framework of new houses and who serve as the backbone of home construction.
And it is not only framers who are in short supply, according to builders. The dearth extends to roofers, masons, sheet rockers, electricians and air conditioning technicians, and it is affecting apartment building contractors as well as homebuilders.
‘Although we are very busy and have work lined up for the next 12 to 18 months, we could be busier if I was confident that I could obtain the proper help,’ said Anthony Zarrilli, principal at Zarrilli Homes in Brick, New Jersey.
When the housing market collapsed in 2006, contractors downsized and the industry continued to shrink well after the 2007-09 recession ended. Between April 2006 and January 2011, the home-building sector shed 466,700 jobs, about half of its total.
NOT GOING BACK
Now, builders are trying to meet the recovering demand, but many of the workers they let go are no longer available.
Given the industry’s volatility, many, like Omar Lisak, will probably never come back.
The 46-year-old from Lincoln, Nebraska, left in May 2008 after an 18-year career as a framer. He is now a truck driver.
‘I need something less risky. People are offering me jobs, they want me to go back, but I won’t,’ said Lisak. ‘I have no need to. I am working with no stress, less headaches and I sleep well at night and don’t have to worry about paying my bills.’
Similar sentiments are shared by Fernando Pages and Pat Quinn, who also quit after decades of building homes.
Pages, 57, has moved into telecommunications and also teaches home-building classes and writes a blog.
‘It was a terrible experience to want to go through again. Right now I am driving to Kansas, where I will teach an eight-hour class tomorrow on foundations,’ said Pages.
After frequent bouts of unemployment, the 57-year-old Quinn called it quits in 2012 and became a home inspector in St. Augustine, Florida, ending a 30-year career building homes.
‘I was always getting laid off every year,’ said Quinn. ‘I would never consider going back even if things get much better in the housing market.’
A tightening of immigration rules in states like Arizona is also cited as a factor behind the labor shortage. With police in the state required to check the immigration status of people they stop and suspect of being in the country illegally, many undocumented immigrants left the state, drying up a source of labor for the building industry there.
According to the NAHB about 22 percent of the workforce in the single-family home building industry are immigrants, though it does not say how many of those are undocumented.
Another factor, according to unions and former framers like Lisak, is the reluctance by builders to pay contractors more.
‘Our contractors are underbid,’ said Bill Luddy, head of special projects at the United Brotherhood of Carpenters. ‘Our people provide a wage that people can live on, compared to contractors who are paying piece rates, who are paying low or cash wages.’
Builders would not be drawn into discussing financial issues. However, Lisak, said they generally paid framers between $4-$5 per square foot, depending on the region and the size of the house. That translated to wages of less than $1,000 per week, he said.
They would need to pay at least $6 per square foot to attract people like him, Lisak added.
LABOR GETTING SCARCE
‘Labor is getting very scarce. We have actually turned a few jobs away because labor is unavailable,’ said Johnny Yates, vice president at Rampart Construction in Dallas.
Yates said an apartment building job that would normally run between 18 to 24 months was now taking at least an additional two months to complete.
In Oklahoma, urban developer Grant Humphreys is also having labor headaches for his new community project, Carlton Landing.
‘I have 27 homes that have not yet started construction,’ said Humphreys. ‘Our people are working six days a week. We can’t ask more from them. We just need more workers.’
Humphreys said his firm would not break ground until year end on projects for which the contracts were signed in May.
Seven years ago, as the housing boom reached its apex, residential construction payrolls peaked at 1.02 million workers. While they bottomed out in January 2011, they are still down about 42 percent.
At 10.8 percent, unemployment among construction workers is higher than for any other group. But this rate includes workers in non-residential construction, which has lagged home building and where workers are more likely to be unionized.
Some economists like Heidi Shierholz of the left-leaning Economic Policy Institute doubt talk of a labor shortage given the slack in the overall industry. ‘Unemployed construction workers outnumber job openings in construction by nearly 12-to-1,’ said Shierholz.
Part of the seeming discrepancy could reflect the uneven nature of the housing recovery, other economists say. Housing has not rebounded as quickly in areas like Michigan and the rest of the Rust Belt as in places like Arizona, California and much of the Northeast.
Labor Department data on wages seems to indicate some tightening in labor availability.
Average weekly earnings in the home-building sector, unadjusted for seasonal fluctuations, jumped by $12.56 to $872.14 in April, the highest level since the series started in 2006. In the 12 months through April, they were up 6.1 percent.
‘You still have quite a bit of displaced workers that are unemployed in construction because their area hasn’t turned around just yet and they are not willing to move to where the jobs are,’ said Jonathan Smoke, chief economist at Hanley Wood in Washington.
(Reporting by Lucia Mutikani; Editing by Tim Ahmann and Claudia Parsons) Keywords: USA ECONOMY/HOMEBUILDING
(Lucia.Mutikani@thomsonreuters.com)(1 202 898 8315)(Reuters Messaging: firstname.lastname@example.org)
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