- Goldman Sachs analysts cast doubt on construction industry claims that a labor shortage is hindering new building, CNBC reported.
- Construction's 5% job growth combined with a paltry 2.2% increase in hourly wages, the report said, is not consistent with a labor shortage.
- The real culprits preventing a more robust homebuilding market, CNBC reported, are logjams and delays at building permit offices and a dwindling supply of land.
The Goldman Sachs report noted that if there were a true shortage, hiring would not be so strong, and wages would be much higher. In fact, the report said construction has beaten all sectors as far as employment gains yet wages have increased at only the country's average.
CNBC said a John Burns Real Estate Consulting survey of 100 U.S. builders confirmed building permit delays but also revealed annoyance with the time and cost overruns caused by new energy regulations. Burns' analysts said that new regulations have added so much cost to new homes that the resale market is going to have to step up to fill entry-level homeowner demand.
This, of course, flies in the face of the steady stream of industry reports that point at labor shortages as a primary cause of relatively low building momentum. The most recent of these is the Houzz Renovation Barometer report, which said that renovation companies are having trouble meeting the staffing requirements for the most in-demand trades like carpenters and framers.
The Associated General Contractors of America also issued its monthly analysis of job numbers this month and warned that increasing construction activity will lead to severe labor shortages in the future. It also made one of its many pleas to federal, state and local governments to implement training programs to bring younger workers into the industry.
In addition, in his analysis of the Associated Builders and Contractors' Consumer Confidence Index (CCI), ABC Chief Economist Anirban Basu said the slightly lower confidence reading for the second half of 2015 was partly due to builder concerns over labor shortages.
However, one industry association, the National Association of Home Builders, did testify that construction codes and permitting and land costs were making the building business more difficult for builders. The NAHB urged Congress to ease up on some of those regulations that they said are making building so expensive.