Most remodelers and design-build firms continue to be plagued by a lack of qualified laborers, and this is driving up costs that ultimately are being passed along to clients, Houzz said in its third quarter Renovation Barometer.
Houzz is a nationally recognized platform for home renovation and design, and its Renovation Barometer is compiled each quarter through an online survey of general contracting, remodeling and design-build firms, and other related companies.
Nearly four in five remodelers and design-builders reported moderate to severe labor shortages. More than half (53 percent) of those owner-managers said their costs for subcontractors have increased. And more than a third (37 percent) of those respondents said they have to pay more in compensation for their own employees.
"For consumers, these rising costs translate to increased project costs to clients, as reported by 59 percent of professionals," Houzz said. "The amount of time it takes to complete a project has also increased for half of firms."
Each Houzz Renovation Barometer has an index value. The greater the index value relative to 50, the greater the proportion of firms are reporting increases in quarterly business activity than those reporting decreases, Houzz said. The third quarter 2016 value of 77 is well above the Q3 2015 value of 64.
"The sustained growth in consumer demand for residential remodeling services, as indicated by the Houzz Renovation Barometer, is naturally driving prices for remodeling services up. Yet, with systematic labor shortages and no major shift in labor conditions expected in the near term, consumers will continue to experience significant increases in project costs and difficulty finding qualified remodelers," said Nino Sitchinava, principal economist at Houzz. "At the same time, remodelers will continue to be squeezed to do more with less, be more selective about the nature of projects they take on and be more cautious about committing to project cost and timeline estimates."
Construction Careers Now Launched in Colorado
Construction industry associations in Colorado launched a new program in July 2016 to bring more workers into that state's building industry.
The Associated General Contractors (ACG) of Colorado, the Colorado Contractors Association and the Hispanic Contractors of Colorado have started Construction Careers Now, a pre-apprenticeship training program that targets young adults just starting out and older adults changing industries.
Construction Careers Now educates and trains them in various construction trades. The instruction includes basic construction measurement, safety and blueprint reading and other industry-needed basics.