Weekly Update: August 17, 2017

Unbelievable Support for Mike Rowe Event

You can see from the logos above that like-minded organizations like ours, state government agencies, and most importantly our members are stepping up to the plate as sponsors of the event.  It’s going to be a pricey evening – upwards of $250k.  We would not be able to make it happen without their support.  If you see a group not represented on the list and should be, send a note to Jay Iverson and we’ll work on following up to add them to our sponsor list.  We have over 200 educators signed up and 60 tables sold already.  Go to our website for further details.

Downtown Des Moines Marriott Room Block Available

If you are making plans to attend our Mike Rowe event, we do have a special room block available at the downtown Des Moines Marriott (700 Grand Avenue, DM).  The rate is $124.00 per night and you need to make your reservation by Thursday, September 7.  Please call 800-228-9290 or 515-245-5500.  The block is under “HBA of Iowa Skilled Trades” group.

September is Associate Appreciation Month

Since 1981, September has been designated as NAHB’s Associate Member Appreciation Month – an annual celebration of Associate member contributions to the NAHB Federation and the home building industry. Designating September as Associate Appreciation Month is just one way of providing the much-deserved visibility and recognition to our invaluable Associate members. What are the Goals of Associate Member Appreciation Month?

  • To honor and thank Associate members for their contributions to the association
  • To increase awareness and appreciation among NAHB’s general membership and leadership of the unique contributions Associate members have made to the association
  • To encourage programs, services and education for Associate members as tools to increase Associate member retention
  • To increase visibility of successful Associate members, Associate member programs, state and local Associate councils and Builder-Associate partnerships and to share those successes with other associations
Top 10 Reasons to Do Business with an Active Associate Member
  1. They support NAHB at the local, state and national levels.
  2. They volunteer time, talent and treasure to help the association accomplish its goals.
  3. They recruit their colleagues and business contacts to become members.
  4. They serve on committees and councils gaining valuable networking opportunity while helping to advance the association’s mission.
  5. By doing so, you increase the value proposition for all membership in your HBA.
  6. They are strong supporters of local and state PACs and BUILD-PAC.
  7. They are a major source of non-dues revenue through sponsorships, advertising, etc.
  8. As industry partners, they are a valuable resource for business and management tips.
  9. They are heavily invested in your business success: You win, they win!
  10. Why wouldn’t you do business with a member?

Labor Shortages More Widespread – Proven  in Stats

Last week’s newsletter had a reach out to any of our members looking for potential employees and the response was excellent.  If only we had large numbers of potential trades people wanting to go into the field – but then again that’s why we’re working so hard on it.

Labor and subcontractor shortages have become even more widespread in July of 2017 than they were in June of 2016, according to single-family builders responding to special questions on the NAHB/Wells Fargo Housing Market Index (HMI) survey.

The July 2017 HMI survey asked builders about shortages in 15 specific occupations that were either recommended by Home Builders Institute (NAHB’s workforce development arm) or that NAHB found to be particularly significant when tabulating Bureau of Labor Statistics data for a recent article on Young Adults & the Construction Trades.  Shortages (either serious or some) were at least fairly widespread for each of the 15 occupations, ranging from a low of 43 percent for building maintenance managers to a high of around 75 percent for the three categories of carpenters (rough, finished and framing).

In addition to labor that single-family builders employ directly, the HMI survey asked about shortages of subcontractors, which have become even more widespread lately.  In the July 2017 survey, the incidence of shortages was higher for subcontractors than for labor directly employed by builders in each of the 15 occupations. At the top of the chart, for example, 85 percent of builders reported a shortage of framing subcontractors, compared to “only” 77 percent who reported a shortage of framers directly employed.

Historically, this has not always been true.  An average shortage calculated across the 9 trades that NAHB has covered in a consistent way since 1996 shows that labor and subcontractor shortages used to track each other fairly closely.  Since 2013, however, a persistent gap has opened, with the 9-trade shortage for subcontractors running 5 to 7 percentage points higher.

A possible reason is that some workers who were laid off and started their own trade contracting businesses during the housing downturn have returned to working for larger companies. This would improve the availability of workers directly employed by builders slightly, while shrinking the pool of firms available for subcontracting.

The 9-trade average shortage for labor has increased from a low of 21 percent in 2012 to 56 percent in 2016, and now 63 percent in 2017.  And this trend has been very consistent.  For each of the construction occupations covered in both years, the shortage percentage, whether for labor directly employed or subcontractors, increased between 2016 and 2017-with the sole exception of excavator subcontractors, for which the percentage remained roughly the same.

The 9-trade average labor shortage is now at its highest since 2000 (which marked the end of an extended period of strong GDP growth that tightened many labor markets and drove the overall unemployment rate down to 4.0 percent).  The current labor shortage seems especially severe relative to housing starts, which have only partially recovered from their post-2006 decline.

Again, the historical pattern has been quite consistent across construction occupations.  Shortages for most of the occupations are more widespread now than at any time since 2000.  The exceptions are shortages that are at their all-time worst since NAHB first started asking the questions in 1996.  For directly employed labor, the shortage of painters is now at its worst ever.  For subcontractors, in addition to painters, shortages of framing crews and electricians are also at their all-time worst.  For excavator subcontractors, the 2016 and 2017 shortages are essentially tied for worst all time.

Additional details, including changes in labor and subcontracting costs reported by builders and the complete history of responses to each question in the NAHB survey, are available in the full report.

The NAHB survey results are consistent with the latest numbers in the Job Opening and Labor Turnover Survey (JOLTS) release from the Bureau of Labor Statistics.  After a decline in May that now appears anomalous, the latest JOLTS shows the number of unfilled jobs in the construction industry rising significantly in June.

New Colorado Law Mandates Trade School Opportunity Path

A new law in Colorado aims to address one of the greatest challenges to recruiting skilled labor: dispelling the myth that all successful career paths require a college education.

The Denver Post reported this week on the implementation of House Bill 1041, which requires public schools to inform high school students about opportunities in trade schools and military service, and what they need to do follow these equally rewarding career paths.

“The law will help reintroduce skilled trades to high school students, who can earn early apprenticeships and exposure to good-paying jobs right after graduation,” the article stated.

The Colorado Association of Home Builders (CAHB) agrees that this new law can help the industry overcome a key issue in the labor shortage dilemma.

“We believe that every little bit helps change the myth that everyone should rack up massive college debt instead of entering the world of construction trades and generating positive income and a rewarding career,” said Scott Smith, CEO of CAHB.

Skip Howes, president of Scott Homes Ltd. in Woodland, Colo., and chair of NAHB’s Public Affairs Committee, believes the law is an important step to help students understand the range of exciting opportunities in the housing industry.

“This new law will open doors for students who are not college-bound and who don’t want to become burdened with overwhelming student loan debt for a degree that is not providing them with viable, productive jobs,” Howes said. “When skilled training is tied to community college courses in business management and accounting, students can learn a trade and even become entrepreneurs in their own businesses.”

Iowa Finance Authority HousingIowa Conference September 6-8

Your allegiance has been requested by order of The Pineapple Club to attend the 2017 HousingIowa Conference. Join hundreds of other good-doers, go-getters and heavy-hitters of the housing industry at Iowa’s premier housing event. Just remember, the first rule of the Pineapple Club is: you must attend the HousingIowa Conference to learn the first rule of the Pineapple Club.   It will be held in Cedar Rapids at the Doubletree September 6-8.  Check out their website here.

Weekly Update: August 10, 2017

$135,750 in Scholarships Awarded Since 2003

We were putting together some historical data for a few legacy donations recently and the numbers are really interesting.  Founded in 2003, the HBAI Educational Corporation has awarded 140 scholarships amounting to $135,750 to students entering the building trades.  Very impressive!  If you would like any assistance in planning your legacy gifts, please contact Jay Iverson.  The upper left photo was one of our first recipients, Michael Kramer from Earling, IA.

Looking for New Employees?

With our full attention focused on workforce development, we’re oftentimes approached by parents and interested skilled trades workers about where they or their offspring should look for a job.  We immediately say “nearly every one of our member companies are looking for workers” – but let’s qualify that a bit.  If you are truly in the market for employees, please email HBAI Executive Officer Jay Iverson if you would like for your name to be offered to these individuals.  We’re talking higher quality, committed, and potentially great employee material.  It happens several times per month and we’re happy to make the introductions.

Home Equity Used for Business Startup

Equity in a home was used as a source of capital to start 284,618 businesses-7.3% of all businesses in the U.S.-according to a new source of data released recently by the U.S. Census Bureau.

The new data source is the Annual Survey of Entrepreneurs, (ASE), which collects economic and demographic information on businesses and business ownership in all major U.S. industries. The ASE collects data on an annual basis for three years beginning with reference year 2014.

The 2014 ASE shows that the industry average use of home equity as start-up capital lands at 7.3%. Six NAICS industries use home equity at higher rates, notably Accommodation and Food Services, Other Services, Retail Trade, and Manufacturing. These industries similarly experience lower rates of profitability, are often not home-based businesses, and on average assemble $50,000 to $99,999 worth of funding as start-up capital.

In short, equity in homes not only plays a significant role in providing capital to start U.S. businesses in general, it is especially important in helping women and racial minorities in the U.S. start new businesses.  Home equity even plays a slightly above-average role in helping African-American business entrepreneurs, even though (as the Census Bureau’s Housing Vacancy Survey shows) African-Americans continue to have below-average rates of home ownership.

Governor’s STEM Advisory Council announces new co-chair

The Iowa Governor’s STEM (Science, Technology, Engineering and Mathematics) Advisory Council on Friday announced its new co-chair will be Roger Hargens, President and CEO of Accumold in Ankeny. He will serve in the role alongside Gov. Kim Reynolds.  Hargens will succeed Dr. Chris Nelson, President and CEO of Kemin Industries. Dr. Nelson will complete his two-year term as STEM Council co-chair in August.

“The Governor’s STEM Advisory Council exists to increase student interest and achievement in STEM and inspire Iowa’s next generation of innovators,” Gov. Reynolds said. “STEM ensures our students are well-equipped for the incredible careers waiting for them across our state.

“Roger Hargens embodies the council’s mission,” she continued. “He strives to recruit, employ and cultivate well-prepared Iowans, including launching the Accumold Scholars program in partnership with Des Moines Area Community College and the state of Iowa. His global perspective, workforce expertise and leadership experience will help take STEM to new heights in Iowa.”

Hargens took over as President and CEO of Accumold in 2000.  In 1995, Hargens started his own company, Heartland Machinery and Sales, Inc., and worked as President and CEO.  He began a 17-year career at Iowa Machinery and Supply Company in 1978, serving in a variety of positions including director regional sales manager and vice president of marketing.

“It’s an honor to join Governor Reynolds in co-chairing the Governor’s STEM Advisory Council,” Hargens said. “I am eager to build on the foundation laid by the governor, her three previous co-chairs and the other visionary, dynamic STEM Council members.  “Young Iowans want to be challenged,” Hargens added. “If we don’t recognize their skills and challenge them, somebody somewhere else will.”

In addition to serving as co-chair of the Governor’s STEM Advisory Council, Hargens also serves on the Iowa Innovation Council, the Board of Directors for the Iowa Association of Business and Industry (ABI) and the Des Moines Area Community College Foundation Board. He is also a lifetime member of the Society of Manufacturing Engineers.

Students Gain Experience, Business Finds Employees

Here was a great story from last Monday at WHO-TV 13 in Central Iowa – it’s exactly what we’re working towards.  You’ll have to wait a smidgeon for the commercial and the discussion on increasing tuitions – but that’s connected with the college debt crisis and the good stuff begins at minute one. It’s very interesting and well done.  It starts off:  From the White House to the State Capitol, leaders are trying to fill what are known as the middle skill jobs.

“More than 60% of all Iowa jobs require more than  a high school degree, but no more than a one or two year education.  We call them middle skill jobs.  I call them great jobs,” said DMACC President Rob Denson.

This is Systems Building Week

Building Systems Week is officially August 7-11. This week-long event aims to educate our members and consumers on the advantages of systems-built homes over traditional stick building.  Prefabricated in an efficient, controlled setting, systems-built homes, which include modular, panelized, concrete, log and timber-framed homes, provide home owners a building alternative that often saves time and money.

For home builders, adopting building systems can alleviate many of the concerns facing today’s housing industry, most notably the cost and availability of labor. With the majority of construction taking place at the factory, systems-built homes require fewer man hours to build once they arrive on site.

Systems built homes also score high on the green-building scale as material waste is significantly reduced in the factory and jobsite. Assembly in an enclosed environment allows systems-built homes to fulfill key components of green building certifications, including the ICC/ASHRAE 700 National Green Building Standard.

NAHB Member Advantage Discounts

NAHB Member Advantage gives members an easy way to reduce expenses, maximize profits and increase efficiency. Through agreements with leading national companies, NAHB offers exclusive discounts on a variety of products and services that can benefit your business, employees and family. In the past year, members have saved over $20M through Member Advantage. For the most up-to-date information about which companies are offering discounts as well as detailed information on how to access the savings, please visit www.nahb.org/ma.

Alliant Energy Stakeholder Group Meeting August 24

Alliant Energy is preparing a new energy efficiency plan to be filed with the Iowa Utilities Board on February 1, 2018. They are in the process of working with stakeholder groups throughout the rest of this year on various elements of our energy efficiency plan.

The first collaborative meeting will review our draft Assessment of Potential results as well as focus on the following customer segments and programs:

  • Residential -prescriptive rebates, audits and new home construction programs
  • Non-Residential and Agriculture – prescriptive rebates, custom rebates,  audits and commercial new construction programs
  • Overarching – low income and financing, behavioral and demand response programs

This collaborative meeting will be held Thursday, August 24, 2017 from 9:00 am to 12:30 pm (with registration starting at 8:30 am) at the Iowa Speedway, 3333 Rusty Wallace Drive, Newton, IA 50208.  Directions, maps, parking and lunch options will be emailed closer to the event.