When the housing market improves, construction employment picks up along with it. In terms of both new homes built and new hires, 2016 is shaping up to be even better than last year.
Single Family Homes Driving the Market
In February, housing starts rose 5.2 percent to their highest point in five months. For the year as a whole, housing starts are expected to increase by 12 percent. Spending on residential construction has also seen steady growth from 2011 and is expected to grow throughout 2016.
Despite the slump the single-family home market has been in recently, the outlook for this market is especially promising this year. The market grew by 7.2 percent in February and experts suggest the growth rate of the single-family home market will begin catching up with the multifamily market. Improvements in the job market are a major factor in this recovery.
The multi-family home market is still expanding, but at a slower pace. For 2016, a 5 percent increase is expected. Falling apartment vacancy rates show demand for rental units is still growing. Even so, experts predict this market’s recovery is nearly complete and the rate of growth will slow in the near future.
On the down side, applications for building permits fell by 3.1 percent in February. This is following a slight dip in December and no change in January. Because fewer applications for building permits signals less construction work in the future, this could mean a slowdown is ahead.
More Jobs for Skilled Workers
The outlook for the construction employment job market also bright. 71 percent of construction firms plan to take on new workers this year, according to a survey conducted by the Associated General Contractors of America. Of those, 8 percent plan to increase their headcount by 26 percent or more.
The majority of firms reported difficulty finding skilled tradespeople, such as electricians, plumbers, carpenters and drywall workers. This leads to delays that can stretch on for weeks if not months, slowing the industry as a whole.
For more in-depth information on construction employment, and the latest on construction leads, contact us at Construction Monitor.