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The events of recent years have created some pain points in the housing market. Younger generations are struggling to buy a first home. Not only are they laden with student loan debt, but a shortage of available properties has also driven prices to unattainable levels. 

This shortage could be blamed partially on the growth of the vacation rental market, with individuals and businesses purchasing properties to list them as short-term rentals. However, the bigger issue is that there simply isn’t a lot of new housing being built, and this has to do with a lack of labor. 

According to an Associated Builders and Contractors (ABC) growth model, the construction industry is currently short an estimated half a million workers, and skilled labor is hard to come by. How did the industry end up in this predicament, and what can be done to course-correct? 

Shortages Related to the Recession and Pandemic 

When the Great Recession hit at the end of 2007, it was hard on many industries, particularly construction. When the housing bubble collapsed, it sent waves through the real estate industry, resulting in millions of underwater mortgages and an estimated five million foreclosures between 2008 and 2013. 

This collapse, in turn, spurred massive cutbacks in construction. It’s estimated that the first two years of the recession alone saw 2.5 million layoffs, along with the closure of nearly 150,000 construction companies across the United States. Just as the industry began to recover, the COVID-19 pandemic hit, sending workers looking for jobs in other fields. 

Skilled Workers Retiring 

With a major loss of labor since the Great Recession, the construction industry is already at a deficit. It gets worse, though. Of the skilled tradespeople who stuck it out, many are at or near the age of retirement. 

While the average age of construction workers is 42, over 22% of the workforce falls into the 55-and-older category, meaning there could be a significant loss of skilled talent over the next decade. 

Lack of New Recruits 

Turnover is expected in any industry, but when skilled professionals retire, and there are no new workers to take their place, it not only impacts supply and demand but the passing of knowledge and experience to a younger generation of tradespeople. The lack of recruits stems from several issues. 

First and foremost, there’s a stigma surrounding skilled trades despite opportunities for good pay, stability, and career growth opportunities, buoyed by a notable lack of student loan debt. With parents and school counselors steering students toward college degrees, trades are suffering. 

There’s also a lack of diversity in recruiting, with groups like women and minorities being overlooked. Further impacting the availability of labor are immigration challenges that have significantly limited the supply of potential new workers. 

The Future of Construction 

With the economy holding steady and the Federal Reserve expected to start reducing rates before the end of the year, demand for housing is only likely to increase. To take advantage, the construction industry will have to address recruiting challenges, including elevating trade programs and overcoming diversity blind spots. 

Are you interested in a career path in the construction trades? Contact RocketCert now to learn more about licensing programs in your state.