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Labor & Material Shortages Equals Slow Rebuilds

With the devastation of Hurricane Harvey and Irma, came images depicting streets filled with personal property; the guts of beloved homes and business lay in heaps of trash. Many individuals have had to turn to friends and neighbors to help with clean up instead of turning to contractors who coordinate and source said labor. Houston resident and contractor Leslie King, president of Greymark Construction spoke with CNBC saying, “There’s not enough people to put them [houses] back together. There’s not enough workers, there’s not enough material, there’s not enough time. I’ve been telling everyone who calls me, I tell them to find a place to live for a year and hope that we can get you done in a year.”

The National Association of Home Builders (NAHB) has requested from the Trump administration an influx of temporary worker visas. This way they can bring in more workers to fill the spots needed to hasten the rebuilding process. As of the end of September, the NAHB has not heard back from the administration. Currently, they are expecting a backlog of two to six years before all the homes, over 100,000, will be completed.

Texas Workforce

An article posted by the Associated Press (AP) in early September stated, “Nearly 70 percent of Texas contractors had trouble finding concrete workers, electricians, cement masons, and carpenters, according to a survey of construction firms that the Associated General Contractors of America conducted in July. Texas has long struggled to replenish its aging construction workforce. The average age of a master electrician in Texas is 59. For plumbers, it’s 62.”

The same article quotes Stephen McNiel of Creative Property Restoration, a remodeling company in Houston saying, “There is a tremendous amount of demand — far more than I’m capable of handling and more than everyone I know in my industry is capable of handling.” He also explained how he could easily use a 50 percent increase in the workforce but cannot seem to find subcontractors. McNiel voiced his concern to the AP about immigration enforcement possibly inflaming the situation, deterring immigrants who want to work from applying for the positions. “The reality of my industry is that most of the work gets done by immigrants,” McNiel said. It appears, now more than ever, all communities devastated by these hurricanes will need individuals who have construction skills no matter the country of origin.

However, the downturn for construction workers was quite noticeable when the housing bubble was popped about nine years ago. An estimated 30 percent of construction workers were forced into other fields creating a smaller pool of all skilled and unskilled workers. According to BusinessInsider.com, Pew Research Center last year (2016) estimated that 28 percent of Texas’ construction oriented workforce was undocumented workers. Conclusions can be drawn from such numbers but keep in mind there is always more than one factor affecting the construction workforce.

In a 2015 survey conducted by the Associated General Contractors of America (AGC) indicates just how many contractors – total response of 1,358 contractors – clearly needed more employees even three years ago.

These are a sample of just a few of the published results:

Building Materials or a Lack Thereof

Besides the labor shortage, there is the immediate need for materials. Contractors and homeowners have to deal with the repercussions of supply and demand.  All in all, supply and demand correlates directly to higher material costs. The cost of construction material has already been on the rise in 2017, but now with a huge demand from both Hurricanes Harvey and Irma, it could be expected that prices will rise even more and possibly faster than anticipated.

Basic building materials such as doors, sheetrock, cabinets, and plywood, just to name a few, will be in short demand as manufacturing facilities attempt to ramp up their production. In fact, Reuters.com indicated that U.S. manufacturing activity swelled to a 13-year high in September. Yet there is an indication that the manufacturing industry was already on the rise with the hurricanes pushing it further, creating a higher level of demand on production that was already lagging a bit behind according to the Institute for Supply Management.

Natural disasters have a love/hate relationship with our community and economy. On one hand it boosts our economy with demand for faster manufacturing and job influx, yet on the other hand, it wreaks havoc on personal lives and insurance rates. Response time appears positive but it might be slow going for those wanting back in their homes as soon as possible.


Heather A Elwing is the assistant editor for Think Realty Magazine. You can reach her at helwing@affinityworldwide.com.