Wednesday, July 2, 2014

Shortage of Skilled Labor Could be solved by Switching to Modular Construction

New home construction is finally picking up in Chicago, but so are the prices. That’s partly because of a serious shortage of skilled construction workers.

Chicago area home buyers are back, especially in the luxury new home market, but they’re paying more because a shortage of construction workers is pushing up wages and prices of new homes are up by 10 to 15 percent.

Electricians, plumbers, carpenters and heating-cooling specialists all in short supply and wages have gone up by about 30 percent.

A much bigger pay hike than most white-collar professionals have seen. The reason? Lots of tradesmen got out when the downturn hit. Many Eastern European immigrants returned to Europe where they can now work anywhere due to the common market.

Some estimates indicated the construction workforce has shrunk by 25 per cent in the last seven years with a national shortfall of one-and-a half million workers leaving immigrants who stuck it out catching the windfall.

Some of the other factors behind the shortage: Many baby boomers in the construction industry are retiring and many young Americans don’t seem much interested in working construction.

If there was ever a time for modular home industry to find more opportunities without the aid of a natural disaster, going after the home buyer’s wallet is the place to look, especially in the high end markets where labor is expensive.

1 comment:

Anonymous said...

Market niches exist that demand a custom design with higher finish details that can be profitable for all involved including the builder, if they understand the value of velocity. Unfortunately, many builders are choosing longer cycles and high margins since its not their $$ at risk. A rep who can promote the value with luxury real estate agents can mitigate this attitude.