Yet with all this residential housing growth, both in new construction and renovations as younger buyers start to buy rather than rent, the industry continues to suffer significant shortages in skilled workers in all phases of development and construction.
The lack of skilled professionals in the industry is now a recognized economic problem and one point of concern for future growth. An Associated General Contractors’ survey shows that 75% of firms expect to add headcount this year and that 78% of them are having trouble finding qualified workers. In addition, 82% of firms expect it to remain difficult, or get even harder, to find and hire qualified workers in 2018.
Indeed, according to the Master Builders' Association of Western Pennsylvania, their members expect they will need to replace 41,000 retiring workers - about 40 percent of that area's construction workforce in the next five years, in addition to accounting for new industry growth.
Employers in the Industry
Employment in the residential construction industry is usually categorized into three broad categories. Within each category, there are dozens of specialties involved as full-time employees, contractors, and sub-contractors.
Employers are broadly categorized as:
Where’s the Growth
It’s true that most jobs within the residential construction industry are experiencing a labor shortage. However, those that are looking to enter the construction field, and according to Pennsylvania and U.S. government statistics, these are the most in-demand and fastest-growing careers:
Construction or Project Manager
Construction managers oversee the overall construction project. They act as an interface between the owners or architects and the construction workers. They take responsibility for the day-to-day work and report back on progress, costs, and issues. According to a recent ACG of America survey, 82% of Pennsylvania construction firms are in need of construction and/or project managers.
Construction Equipment Operators
Construction equipment operators use a wide range of equipment at job sites: bulldozers, road graders, trench excavators and more. Operating engineers typically learn through on-the-job training, apprenticeship programs, and union sponsorships.
According to the same ACG of America survey mentioned above, 90% of Pennsylvania construction companies find these positions difficult to fill.
Solar Photovoltaic InstallersAs the U.S. moves away from fossil fuels, solar energy has become more efficient and cost-effective to deploy in homes. Solar Photovoltaic Installers focus on the installation and maintenance of solar panels. Specialized training is necessary to become proficient at this vocation. It’s expected that the number of jobs in this field will double through 2026.
Construction laborers are in demand across the entire construction industry – both residential and commercial. Typically this is the “grunt work” at a construction site, including digging trenches, operating or tending machines such as concrete mixers, loading and unloading materials, and cleaning or preparing a site before and after construction.
Information from the Pennsylvania Department of Labor and Industry shows brick masons and block masons within the laborer category are two of the fastest growing jobs in the Commonwealth – projecting 33% growth over the next five years.
Two notable programs in Pennsylvania are attempting to stem-the-tide of these losses in the industry and reignite the pipeline of skilled construction professionals available to contractors.
Pennsylvania’s Department of Labor & Industry’s Apprenticeship and Training Office (ATO) recently added five new apprenticeship programs and two new apprenticeship occupations to its list of approved apprenticeship programs. In just two years, ATO has added 1,714 new apprentices and 66 new registered apprenticeship occupations statewide.
The Pennsylvania Builders Association (PBA) sponsors its Endorsed Trade Program that awards hundreds of students an advanced trade certification in collaboration with trade schools around Pennsylvania in fields such as building construction, cabinetry, HVAC, masonry, and plumbing. Students who complete the PBA-certified program are then tested and receive their accreditation - providing reassurance to builders and potential employers they are well-prepared for work with a residential construction company.
Pennsylvania student chapters of the National Association of Home Builders (NAHB) including Penn State University and Penn College of Technology were award-winners at the 2018 NAHB International Builders’ Show Student Competition on January 10, 2018, at the International Builders Show (IBS) in Orlando, FL. The Penn State NAHB Student Chapter won first place in the four-year college category entitled Residential Construction Management Competition. Penn College of Technology was awarded third place in the two-year college classification.
The Pennsylvania real estate market saw a significant increase in younger buyers in 2017, coupled with reports of first-time home buyer demand surging nationally overall means strong building growth in the Commonwealth for the first part of 2018.
Causes of this upswing include supply shortages, especially in markets like Philadelphia that make homes less affordable, reducing incentives to existing homeowners who want to upgrade. Millennium buyers cite expanding families, needing more space and relocation as their primary reasons for buying a home in recent surveys from the PA Realtors Association. Finally, recent home buyers surveyed said being tired of renting was their primary reason for buying.
Strong economies in Pennsylvania in areas like high-tech hubs Philadelphia and Pittsburgh along with growing transportation hubs like Allentown and York are contributing to the overall youthful trend and away from second or third-time home buyers that trend older.
The biggest trend that nearly all home builders are catering to is the demand for energy efficiency. Today’s home buyers are in tune with the need for a greener and more efficient home that helps them save money on their utility bills each month. Home designers and architects are working together to create layouts that utilize sustainable materials, natural light, and renewable energy sources to keep costs down for purchasers over time.
Another trend maintaining its popularity is the open floor plan. Families today prefer a home design that is less closed off and more open. Instead of separated rooms, such as the kitchen, living room and dining room, buyers today want a large open great room that performs all of these functions. This way, families can be together and spend more time with each other.
Smart homes are also evolving in their popularity and design. Homeowners today can opt for smart appliances that connect to their phone via mobile technology. Additionally, home builders are using technology to help keep homes connected and comfortable with climate control, security, and other essential features.
Homebuilders across the country are also focusing more on formal outdoor spaces. Instead of simply leaving it up to the homebuyer to figure out, more new construction plans are creating extensive outdoor gathering areas for buyers to enjoy.
Finally, for those interested in the finer details, look for design accents like bucket sinks, concrete accents, and brass décor.
The PA Builders Association is marking the end of 2017 with an end-of-year summary of important happenings in the Pennsylvania residential housing industry and within PBA. Now we look forward to an exciting 2018!
The PBA Fall Board Meeting in Hershey, PA on October 28 saw the unanimous election of 2018’s slate of officers, including incoming PBA President Kert Sloan, VP Maria Coutts, Secretary Jon Sukonik, Treasurer Joe Harcum, and Associate Vice President Betsy Dupuis. PBA also welcomed its roster of newly appointed Regional VP’s and Regional Legislative Officers. Pictured: 2018 PBA President Kert Sloan.
Governor Signs PA Builder Legislation to Fix Building Code Adoption Process
On October 25, Governor Wolf signed House Bill 409 - PBA's long-awaited reforms and updates to the Pennsylvania Uniform Construction Code (PA UCC). Act 36 of 2017 extensively revises the code review process undertaken by the Department of Labor and Industry's Review and Advisory Council (RAC) for future updates.
NAHB Building Systems Housing Summit
The 2017 Building Systems Housing Summit came to the Hershey Lodge in Hershey, PA from October 8 – 10. Hundreds of attendees from around the country gathered to learn about emerging trends in the systems-built housing industry. The summit also allowed for guests to network with builders, manufacturers, and suppliers of log, timber frame, modular, panelized and concrete homes.
BUILD-PAC Trustees Reception
The home of Steve and Jen Black in Elizabethtown, PA hosted a cocktail reception of the members and invited guests of the Pennsylvania BUILD-PAC Trustees on Wednesday, August 23.
Guests included Rep. Patrick Meehan (PA 7), Rep. Charlie Dent (PA 15), Rep. Lloyd Smucker (PA 16), and Rep. Scott Perry (PA 4).
BUILD-PAC, or Builders United in Legislative Decisions Political Action Committee, is the political arm of the National Association of Home Builders (NAHB). It helps elect pro-housing, pro-business candidates to federal office.
PBA Grassroots in Action
On June 14, PBA members gathered at the 2017 NAHB Legislative Conference and Midyear Board of Directors Meeting in Washington, DC to discuss issues vital to the home building industry. After a morning briefing on legislative issues, dozens of our members visited Capitol Hill offices to meet with Pennsylvania representatives. In total, NAHB members conducted over 250 meetings, conveying the importance of the issues currently facing the home building industry.
PBA Awards 772 Endorsed Trade Program Student Certificates
PBA awarded 772 students their certification from the PBA Endorsed Trade Program for the 2016-2017 school year in June. The program currently includes 111 technical programs from 28 different trade schools throughout the Commonwealth.
On November 7, 2017, Pennsylvania voters clicked “Yes” for the Homestead Exclusion Amendment. According to Commonwealth official election results, almost 54% percent voted for the referendum, which would allow local taxing authorities to exempt residents from paying property taxes on their homes.
The result will have no immediate impact on taxes until the state General Assembly passes legislation allowing up to 100 percent of a home’s assessed value to be exempted from property taxes. Indeed, if the intent of the referendum is realized in Harrisburg, counties, school districts, and municipalities are then bound to replace the funds collected from property taxes with other sources of revenue. However, Pennsylvania school districts hold millions in long-term debt that would need to be paid off. In fact, of the 500 school districts in Pennsylvania, nearly 90% have enough debt that taxpayers would continue paying property taxes in the future, regardless of legislation. Is 0% property tax realistic in the future for Pennsylvanians?
The PA Builders Association and many other groups think so. PBA encouraged a “Yes” vote on November 7. Continued pressure on the General Assembly to find new or expanded revenue streams coupled with this referendum could lead to a major tax overhaul. As Congress works on tax reform at the federal level with proposed changes to deductions, personal exemptions, and restructuring of overall tax rates, the proposed legislation’s effects will only heighten the issue for some time to come.
The PBA Fall Board Meeting in Hershey, PA was a “sweet” success. This year saw the unanimous passing of PBA’s 2018 Budget and the election of next year’s slate of officers, RVP’s, and RLO’s. We also engaged in an excellent seminar on disaster recovery, our annual Meet the Builder event, and the Government Affairs Committee’s confirmation of the signing of PA House Bill 409 (the “RAC Fix” bill).
Meet the Builder
PBA’s third annual Meet the Builder featured 11 building industry focused service providers at a casual cocktail reception on Friday, October 27 at the Hershey Lodge. The event was a great way for PBA’s active builders and remodeler members to socialize, share ideas, and meet large national/regional product manufacturers as well as suppliers and vendors. Thanks to our sponsors and attendees for a great event.
Disaster Recovery Fall Seminar
Members gathered Friday afternoon for a seminar entitled “Lessons Learned” from Hurricane Harvey & Irma. PBA members and associates were joined by Ali M. Memari, Ph.D., P.E., Bernard and Henrietta Hankin Chair of Residential Construction at The Pennsylvania State University and Director, Pennsylvania Housing Research Center (PHRC) in a roundtable discussion about how Pennsylvania can use natural disaster information from storms like Harvey and Irma.
Finally, a huge thank you to our partners EK McConkey, and BDX for networking with our members and assisting them with questions over the weekend. We also thank McConkey for sponsoring the EOC Training Reception at Troegs.
PBA Winter 2018 Board Meeting
Mark your calendar for the next Board of Directors Meeting on February 24, 2018, at the Doubletree by Hilton, Reading, PA. We look forward to seeing you there!
Other Key Provisions in Act 36 of 2017 include:
Speaking on Final Passage of House Bill 409, Prime Sponsor Rep. Eli Evankovich stated,
"House Bill 409 creates a non-agenda-driven process for adopting those codes, and it is a delicate negotiation not just between the builders' associations, who stand up for the consumers of Pennsylvania, but also environmentalist groups, local government groups, labor unions, companies that are in the industry making products that are sold for residential and commercial construction. It is a good step in the right direction for fixing this process in Pennsylvania."
PBA members will receive continuous updates through their Local Associations as the process of the RAC 2015 Code Review unfolds.
America’s skilled labor shortage is the focus of a recent cover story on CBS Sunday Morning that features PBA Endorsed Trade Program partner Lehigh Career & Technical Institute in Schnecksville, PA. The story also includes interviews with "This Old House" host Norm Abram, Robert Dietz, chief economist for the National Association of Homebuilders, and Mike Rowe, former host of the TV show "Dirty Jobs."
Kurt Adam, assistant superintendent at LCTI is interviewed about their programs in 41 different trades that provide employers with skills such as plumbing, welding, and carpentry.
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