By now, everyone has seen in the news an overwhelming and ongoing amount of concern within the construction industry about labor shortages. There are a variety of factors that contribute to a decline in skilled labor. As many know, scores of workers left the industry during the Great Recession and gained new skills in new disciplines. In addition, the Millennial Generation and younger are not showing much if any interest in a career within this segment.
While we can agree it appears inevitable that robots will fill much of the mechanical assembly line type labor long-term that can be done in a production facility location what about highly skilled trades? Trades such as electrical, plumbing, carpentry, and certain types of installation are individualized to the job at hand. Will this go away and everything become standardized? I doubt it, as long as humans continue to think they will want to customize their home in unique ways which will involve conversation and modification.
I have been working within the construction industry since 2004 selling products to the architect and builder community in multiple parts of the country. This year it became clear that getting into construction on the labor side of the segment is one of the greatest opportunities long-term.
In current state, the national builder is working in scale on razor thin margins to meet sales targets and the local custom homebuilder can be stuck on a project for 1-2 years in some cases. For entry level price points large investment firms that are often publicly traded are paying cash. Typically, they renovate and rent out until the market justifies a resell. “The same story is playing out across the country. A confluence of factors-rising construction costs, restrictive zoning rules, and shifting consumer preferences, among others-has already led to a scarcity of affordably priced housing in many cities. Investors, fueled by Wall Street capital, are snapping up much of what remains.” Casselman and Dougherty.
Stop and reflect on this…the housing market is once again inflated due to investors fueling and owning the entry level price point in multiple parts of the country.
Why is this happening? To me, it feels as if the younger generations view construction like a car mechanic. There is no interest or comprehension of what it takes to complete the specific project at hand. As a result, this and the overall shortage are going to lead to exorbitant prices for skilled labor.
More importantly, it is creating a significant opportunity for those willing to bridge the gap with an honest and fair business model.
Similar to fashion, which constantly recycles the same styles over and over our economy appears to be coming full circle within the construction industry. It is one of the last segments on the brink of a revolution in terms of building process, products, efficiency, and now labor.
In a flooded technological market, the construction labor field which is a dinosaur too many is ripe for the taking in 2019. Personally, I have made the decision to enter this arena and be a contributor in overcoming the ongoing shortages that could hinder the historical American dream of owning a home and leading an independent lifestyle.
This article is really meant to be a call to action. We need to work together and promote/ensure this critical need is met for future generations.
Casselman, Ben and Dougherty, Conor. Want a House Like This? Prepare for a Bidding War With Investors. June 20, 2019. nytimes.com