The tight labor market in this industry has caused construction wages to rise much faster than the steady wage growth for all workers over the last year.
It’s pretty clear that homebuilders nearly everywhere are struggling to keep up with demand as costs rise.
Svenja Gudell is a contributor at Forbes Magazine, who writes:
“Wages for all private-sector workers have been increasing steadily since the start of last year, rising between 2.6 percent and 2.9 percent year-over-year, according to data from the U.S. Bureau of Labor Statistics.
At the start of 2017, wages for construction-industry workers were growing slightly slower than wages for other workers – around 2.5 percent per year. But they are now growing 3.8 percent per year.
The shift is even more pronounced for residential construction workers, in particular: Their wages were growing around 2.4 percent per year at the start of last year, but are now growing at a 5 percent annual pace.”
Construction activity went way down during the Great Recession, of course, and wages softened.
Gudell concludes:
“It would make sense that as construction activity picked up during the recovery, residential construction wages would also rise to some extent. But residential construction wages have picked up a lot more than construction starts.
If the residential construction labor market today resembled the residential construction labor market of the mid-2000s, the country likely would be seeing substantially more new home construction than it currently is.”
