Labor shortages are crimping multifamily builders, Chris Bruen, director of Research at the National Multifamily Housing Council, said in a post late last week.
"In the latest round of NMHC's construction survey—which took place from May 17 to June 1, 2021—nearly half (47%) of respondents said they were impacted by the availability of labor," Bruen noted.
He pointed out that the shortages has been around and growing for years before the COVID-19 pandemic hit as multifamily construction ramped up to rates not seen in over three decades:
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"The rate of overall construction job openings has been increasing steadily over the past decade—bolstered by an expanding economy—reaching a peak of 5.2% in April of 2019. After moderating somewhat in late 2019 and 2020, the rate of openings is once again approaching peak levels, rising to 4.4% (preliminary) in March 2021."
Bruen said the shortages have led builders to raise rates, but it remains to be seen whether the higher pay will attract enough workers for the industry to grow at pace.
A dearth of skilled construction labor is also impacting single-family home building, Richard Branch, chief economist for Dodge Data & Analytics, said in May. He predicted the shortage, higher material prices and an inability to get enough supplies will limit the ability of this sector to show the same rate of expansion this year as it did last.
A labor scarcity was also cited as a contributing factor to a decline in apartment construction by 12% during the pandemic, by RENTCafe in October.
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