The skilled labor shortage is beginning to impact construction costs in Connecticut. Builders who used to handle most of the jobs on a construction site have pared down their staffs and rely more on subcontractors. Now those subs are having trouble finding workers – and it’s driving up the cost of construction.
Last year saw the fewest number of building permits on record, said John Carrier, a second-generation homebuilder with By Carrier. With fewer homes being built, he’s so far been able to keep up with demand, but this spring has been busy, and some of his subcontractors are struggling.
“We’ve been busy enough that I’m most of our subcontractors’ primary source of work,” Carrier said. “Many of them are trying to hire but can’t find skilled labor. It’s tough to find people to show up on time and want to be there. That’s 85 percent of the battle. Last week, a guy I know who does low voltage electrical work told me he hired three people and only one of them bothered to show up.”
Carrier has cut back on hiring in the since the recession. His company still does site work, road-building, design and trim, and subcontracts out a lot of the rest of the work. His subcontractors have also trimmed their workforce and smaller crews need more time to get houses built. He said it hasn’t driven costs up much, but he thinks it will in the second half of this year.
There were about 1,000 single-family homes built in Connecticut last year, according to Norton Wheeler III, immediate past president of the Home Builders and Remodelers Association of Connecticut. That’s down about 80 percent from the pre-recession volume, and contractors who survived have downsized accordingly.
“Everyone has streamlined and minimized expenses,” Wheeler said. “We’re small. Our staff was downsized by 15 percent. We used to do production housing and development; now it’s more custom single-family homes and major remodels with some multifamily and commercial work. We’ve learned to diversify in order to be successful.”
Wheeler’s subs are having trouble finding quality apprentices and journeymen, he said. When they can find good workers, those workers demand higher salaries and that, too, drives up costs.
No Quick Or Easy Solutions
Working on big projects in an area you’re very familiar with makes it easier to get reliable subcontractors, said Kevin Santini, co-owner of Vernon-based Santini Homes.
“If we were starting a brand new project in the southern part of the state, we’d be starting from scratch and we’d be having a real hard time,” he said. “We’re doing fine because we have large projects [for which] we lined up labor far in advance.”
Santini hears from his peers that subcontractor costs are rising because of the lack of skilled labor, and he expects the situation to worsen as the recovery continues.
“It’s mostly the licensed plumbers, mechanical guys, ductwork guys and electricians,” he said. “Most companies sub that out and our subcontractors have trouble getting licensed guys to work for them. It’s basic supply and demand and when things get busy again, it will be a problem.”
Wheeler said rising taxes and a depressed economy are holding the state back.
“Our issue in Connecticut is taxes and lack of job growth. We have only recovered 75 percent of the jobs we lost in the recession,” he said. “That has a direct relation to housing values, which are flat. I’m fortunate that I’m located on the coast, which has been much busier than most of the rest of the state.”
Carrier, whose father immigrated to the U.S. from Canada, said allowing more people to immigrate into the country might help address the need for more skilled labor.
“Over the last 15 years is a lot of work visas have been mostly for people who do IT work or doctors or engineers,” he said. “My family came here from Quebec in the ’60s to work. The process is much more difficult now. It seems like they’re not letting in people who would start in the construction trades.”
Santini said he thinks too many young people don’t even consider a career in the trades.
“There’s got to be some outreach to younger people to become a licensed plumber or electrician,” he said. “Maybe look at the qualifications and make sure they aren’t so onerous that people don’t want to do the work. You can make a really good living in the trades.”
