Construction Sector Hiring Slows as Builders Face Material Shortages

The construction sector gained more new workers than other industries, yet material shortages are causing bottlenecks for builders, limiting their ability to hire additional labor. In March, 19,000 residential specialty contractors were hired, according to MarketWatch. In April, that dropped to 4,400. While the construction sector has hired more than 45,000 employees from February 2020 to April 2021, other industries’ slow hiring are affecting the construction sector’s ability to hire. Logging, for example, lost employees in April, marking the third consecutive month of losses. Steel and appliances are also posting long lead times, but MarketWatch notes these are typically imported from other countries.

The material shortages are driving up the price of new homes, pushing the cost some $35,000 higher, according to research from the National Association of Home Builders. More than that, it’s dragging out the duration of construction projects. “They’re laying down a foundation, but they’re not proceeding to frame the home,” Dietz said.

With less work to do as builders wait for supplies to arrive, many have opted to hold off on taking many more new sales, or hiring more workers on the off-chance they aren’t able to do the work.

Homebuilders also employ salespeople to handle the customer-facing side of the business. There, too, builders have remained hesitant to ramp up hiring. “The large public builders have a tremendous order backlog right now,” Reichardt said.

The bottlenecking caused by the supply shortage means that many companies are already at capacity, so boosting sales volumes isn’t a concern. Consequently, builders aren’t looking to increase their workforce of salespeople.

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