Building material prices topped the list of problems builders in the United States faced in 2018, but cost and availability of labour is expected to return to the number one spot in 2019, according to special questions on the January survey for the NAHB/Wells Fargo Housing Market Index.
The survey results, released Monday, showed that material prices were a significant issue for 87% of builders last year. In 2019, however, “only” 69% of the builders expect them to continue being a problem.
As a March 15 release explained, after significant data revisions for 2018, new data from the BLS Job Openings and Labor Turnover Survey (JOLTS) indicate that US construction job openings remained near a cycle high as of January 2019,
an indication that the skilled labor shortage continues into 2019. The
open position rate (job openings as a percentage of total employment
plus current job openings) held steady at 3.9%.
The rate was just 3.3% a year ago. On a smoothed, twelve-month moving average basis, the open position rate for the construction sector increased to 3.7%, a post-recession high.
The peak (smoothed) rate during the building boom prior to the recession was just below 2.7%. For the current cycle, the sector has been above that rate since October 2016.
Back to building materials, in 2011, building materials prices was reported as a significant problem by 33% of builders.
The share increased to 46% in 2012, 68% in 2013, 58% in 2014, 42% in
2015, 48% in 2016 and 77% in 2017, before peaking at 87% in 2018.
Meanwhile, only 13% of builders reported labor as a significant problem in 2011, followed by 30% in 2012, 53% in 2013, 61% in 2014, 71% in 2015, 78% in 2016 and 82% in both 2017 and 2018.