Dive Brief:
- Despite an overall decrease in the number of U.S. residential construction firms between 2007 and 2012, a National Association of Home Builders analysis of U.S. Census Bureau Survey of Business Owners data revealed that the number of minority-owned firms in that timeframe rose 44% from approximately 109,000 to 157,000.
- Minority-owned firms also grew their overall share of the residential construction business from 14% in 2007 to 23% in 2012.
- Reflecting an overall industry share increase of one-person residential construction shops, the number of minority-owned firms with paid employees increased only 5% from 2007 to 2012, while the number of one-person minority firms without payroll shot up 49%.
Dive Insight:
During a recent Associated Builders and Contractors diversity conference in Washington, DC, industry executives came together to discuss ways to increase minority participation in construction. Executives of the minority-owned businesses present at the conference said that they wanted to be viewed as quality construction companies first and minority businesses second, but they added that their diversity offered them a "competitive edge" when vying for available talent.
Unlike small residential contractors, minority-owned commercial construction companies have the additional benefit of disadvantaged/minority business enterprise (DBE/MBE) programs that require a certain percentage of minority participation on many publicly funded construction projects. Experienced and high-performing DBEs and MBEs have a chance to gain an industry foothold in these situations, but large general contractors have complained that they cannot find enough qualified firms.
As far as the overall construction workforce, attracting more minority workers is one way industry players believe they can address the continuing skilled labor shortage. When other minorities can "see themselves" in a company's makeup, they will likely be more enthusiastic about working there themselves. According to the Brookings Institution, 15 million whites will have exited the U.S. workforce by 2030, but 17 million Hispanics, 4 million Asians and 3 million blacks will enter.