Morgan Brennan of the Forbes staff penned a great piece recently that “states the obvious” to folks in the construction industry - There will be Labor shortages! She quotes some very credible sources to indicate the current state of the industry and the rising need for skilled labor in both the residential and non-residential sectors as the economy begins to recover.
Here in Houston for example, the economy is recovering at a rapid pace. Within a mile of my office, there are currently over 1,000 multifamily units under construction. Last weekend, I toured a single family home that had been listed only 3 days earlier. I was told by the listing agent that they had had 105 visits and 4 contracts already, and based on a conversation I overheard with another agent, they were going to get at least one more. Resale housing stock in the city is limited and the current Multiple Listing Service listings represent only 3.5 months of stock. We are just entering the high sales season for residential, and we are already far below our normal levels.
According to my conversations with developers and builders, the current stock of residential lots is depressed due to the recession, and new stock is not coming to market fast enough to keep up with demand. Additionally in the Houston region, there are over 70 new office buildings on the boards and under construction. Houston, according to the Forbes listing of top cities for new construction, is number 3 on the list behind New York City and Dallas.
We have been tracking these forecasted shortages for a couple of years, and now the shortages are about to become a reality. The core of the problem is that after losing 2.2 million jobs during the recession, it will take another cycle to replace them.
You can read the full article here.