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.

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