Construction spending fell in June for the second month in a row:
This is hardly cause for panic, but it's the first time construction spending has fallen two months in a row since the end of 2022. It's the first time commercial construction has fallen two months in a row since 2021.
Nobody here can find new, skilled construction workers; we need trained carpenters from the south to help alleviate the labor shortage. We have the same issue with restaurant workers. And I live in Vacationland, where restaurant workers in the summer thrive.
But there's no place to live, housing costs to much because its all on airbnb and seasonal workers and families with small children have gotten shut out of not only the buyers market but the renters market, too. We desperately need to build new housing.
But there's a shortage of skilled labor for the construction industry. . .
It feels like that song, "there's a hole in my bucket."
It's absolutely nonsensical. There are 100,000,000 people in the world displaced from their homelands; refugees needing both jobs and homes. And we fear them and want to keep them out and treat them poorly and won't let them work and we still cannot find enough workers to build more homes or feed us.
It's the most idiotic thing I've ever heard of. There's a hole in my bucket. And I aim to repair it with joy.
According to Paul Krugman and some other economists I follow there are signs the economy is starting to slow down. This could be the result of that weakening. The Fed should have already cut the rates. I am worried that the Fed is afraid they will be accused of looking political if they cut the rate before the election but if this trend continues they need to act.
If there is a real shortage of construction workers why don't contractors pay more? It looks like pay overall is good in the industry by current standards - over $70k/yr - but the data do not indicate any particular increase in demand.
https://fred.stlouisfed.org/graph/?g=1r6zN
The trend over time is similar to average production worker wages, and real construction wages by the CPI have still not passed the 70's high. Of course contractors always want workers who will take lower pay.
Of course contractors want to bring in immigrants who will take a lot less than $70k and they will whine about it to anyone who will listen - like reporters.
I think the shortage of housing is due to other things than the shortage of labor, like zoning restrictions and land and other costs.
Most of Trump's arguments about immigration are bogus, based ultimately on racist xenophobia. But the idea that there is a desperate shortage of labor in the US is also bogus. Talk about this again when real wages are rising rapidly.
Normally I'd agree with this. Remember "structural unemployment"? But with very low unemployment, there are bound to be shortages of workers, particularly on a regional basis. You could offer more money, attracting workers from other areas, but that would just move the shortage in another area. The real answer to this is, of course, more immigration, but the xenophobic right has foreclosed this as a solution. Even more liberal people have adopted the "we have to limit immigration" meme.
Not seeing a slowdown in NE Ohio, that's for sure
Three comments: First companies used to move manufacturing to places in the US with cheap labor and low costs of living. They still do that but now these places are not in the US. Still, the huge decline in US manufacturing means there are plenty of low cost places with cheap and available housing all over the country. It should be even easier for IT businesses to take advantage of this than it was for manufacturing. Maybe the 20 year olds won't consider leaving the big metropolitan areas, but I bet the 40 and 50 year olds frozen out of IT employment would consider it.
Second, even now with low unemployment, personal income for the bottom 90% of households is a smaller share of the total than it was in 1970. Until such time as it rises from 49 or 50% of the total to 64 or 65% of the total, I will call any claim of a general labor shortage totally bogus.
Third, a growing US population is a terrible thing. It only benefits the billionaires who get larger markets and pay lower wages. People in the US generate more CO2 per capita than any other substantial country. More Americans is not a good thing for the world or for us. In the future we will probably be retreating from the coasts due to sea level rise. Having a population of less than 300 million would make that easier than having one of a billion.
We want to manage our population decline. Some level of immigration is helpful. Immigration also makes the country a more interesting place to live. That level should be set with some regard for the future and with no regard to the desires of billionaires and corporations. All immigrants can be refugees as far as I'm concerned.
I looked up US Census data for annual earning by occupation in 1970 and 2022 for all US workers. Here's the comparison in 2022 dollars:
Carpenters: 2022: $46,349 1970: $52,208
Electricians: 2022: $60,520 1970: $69,606
Plumbers: 2022: $56,011 1970: $67,093
How much has productivity improved in these trades in the last 52 years? I don't know, but I'd imagine it has: More & better power tools, better connectors & fasteners, not so much lead soldering. But I cannot believe it's declined by 10 to 20%.
Fact free speculation follows:
“Long and variable lags” from higher interest rates finally denting construction sector? I dunno, maybe too long to be showing up now?
Whenever the stock market, economic growth, etc., go up, we feel like it’s normal, expected and good. 10% a year forever, but if things slow down to -2%, what’s wrong?
Things that can’t go forever probably won’t, or insert a better cliched tautology.
Sometimes unusual growth is just normal growth moved forward, compressed in time.
I would think construction of office buildings has been put on semi-permanent hold.
New home construction is down. I guess people don’t wanna live in the superXurbs anymore, developers don’t wanna build cheap or mid-market houses, mortgage costs are still high…
Apartment construction added lots of new units nationwide in response to price signals, demand spiking. Now places where they can/did build (like AustinTX) are sitting on lots of empty units, cutting prices and stressing out their lenders. Places where they can’t build (SF/Bay Area) haven’t added units in years.
Brick and mortar retail? Converting abandoned malls into something social maybe.
Definitely, construction is slowing down, particularly in multifamily (5+ units) and to a lesser extent commercial construction.
With lumber prices finding a floor and remaining relatively stable, it's a great time to build a house if you have cash.