Labor and Subcontractor Shortages
NAHB reported that labor and subcontractor shortages remain widespread. They asked builders specifically about shortages in 15 different occupations. Builders reported that shortages ranged from a low of 47% for building maintenance managers to a high of 83% for framing crews. Many of the shortages were virtually unchanged from last year, indicating that the problem is chronic. Seventy-nine percent of builders said that the shortage of labor was making it hard for them to find subcontractors with well-trained employees.
The Aging Workforce in Construction
NAHB analysis of the most recent 2017 American Community Survey (ACS) data reveals that the median age of construction workers is 42, a year older than a typical worker in the national labor force. The median age of construction workers varies across the states. States with the oldest median age of construction workers (45 years old) are Connecticut, Maine and New Hampshire, followed by Illinois, Kentucky, New Jersey, Pennsylvania and Wyoming. Construction workers are younger on average in the central part of the nation. Half of all construction workers in Utah are under 38, while in Nebraska and Texas half are under 39. In Kentucky the median age of construction workers is four years higher than the overall median, followed by Illinois, Wyoming, Arizona and New Mexico (+3). Workers in Delaware are two years younger than the overall median. In some areas the Great Recession drove workers into other occupations, and they have not returned; more than 80% of construction firms in Texas reported having a hard time filling their open positions. Construction occupations with younger workers include helpers, roofers and fence erectors. Older workers are concentrated in managerial positions such as inspectors, construction supervisors and construction managers.
Girls Encouraged to Consider Careers in Construction
The National Association of Women in Construction has organized its first camp in Texas in an effort to encourage girls in middle school to consider careers in the industry. Thirteen girls in the program will spend one week gaining hands-on experience and acquiring marketable skills. This is the first camp of its kind the organization has put on in Texas, and it comes at a time when contractors say they can’t find enough workers. The group will pour concrete, build and wire their own lamps and build a library stand over the course of the week. A recent Associated General Contractors of America report showed construction firms expanded their workforces across much of the country between April 2018 and April 2019, with Dallas-area companies creating the second-most jobs in the nation at 9,200. AGC noted that many firms would have hired even more employees if they could have found qualified workers. Meanwhile, women represent just 10% of the construction industry workforce, according to data from the U.S. Bureau of Labor Statistics. That’s lower than any other industry the agency tracks. NAWIC hopes to convince the next generation of girls that working in the construction sector is a good way to build a career.
Home Design and Building Trends
Home design trends for 2020 are reflecting some new trends as well as the continuation of some popular ones, according to The Plan Collection, which produces home plans for builders.
Technology is growing more important, and people want designs that are technology friendly. The kitchen Command Center includes multiple charging stations, convenient ways to hide charging cords, dedicated space for digital assistants and easy access to iPads or tablets. Some kitchens are being designed to include a dedicated space for package deliveries so items can be dropped off without delivery personnel needing to come into the main house or garage.
Prep Pantries in kitchens are being designed to accommodate countertop appliances like microwaves, coffee makers and blenders, prep areas, warming ovens and prep sinks. Designers say this trend is reminiscent of the butler’s pantry of old and allows the kitchen to shine in its relatively new role of entertainment center while all the mess is hidden away.
Environmental considerations are factoring into new home building trends, with people looking for maximum wall, roof and foundation insulation, energy and water-efficient appliances and energy-efficient heating and cooling.
Flex spaces remain popular, with people looking for rooms that can be transformed into different spaces from office to playroom to guest suite as wants and needs change.
Open floor plans continue to rule, and generally include a blended family room, kitchen and dining space that enables togetherness and creates a greater sense of space.
“Zen Dens” are growing in popularity. They are seen as a place to get away from it all and practice yoga, meditate or exercise.
High ceilings are still desired, despite being typically less energy efficient. But people also want more energy efficient windows with a window to wall ratio below 30%.
Business in the Cloud
The public cloud market is growing rapidly, with spending in the US expected to increase by 36% this year. Approximately 19% of IT workloads are now running on the public cloud, with 55% of the survey group using cloud-based email systems, 53% relying on the public cloud for web hosting, 52% for sales and marketing applications and 52% for ecommerce. Amazon is currently the second-largest company in the world by market capitalization at just over $900,000 billion, slightly behind Microsoft, according to Barron’s. However, Amazon Web Services, their cloud-computing operation, is worth half a trillion dollars, considerably more than Microsoft’s value in this arena.
Convenience Vs. Privacy
The onset of in-home delivery options is raising privacy concerns. Recent announcements from Amazon and Walmart that they will be launching in-home delivery raised the question of what companies will do with all the footage of the inside of homes that will be gathered by employees wearing proprietary body-cams so that consumers can watch the delivery in real time. The bodycams are positioned as security measures for consumers, but companies could use the footage to analyze homes and use the information to improve ad targeting or training materials for people creating vision algorithms. Another risk is the safety of all the access information needed, including entry codes. When Amazon rolled out Key delivery in 2017, security researchers found a way to hack the camera and freeze the image. Amazon quickly patched the hole, but the discovery illustrated that almost any networked hardware can be vulnerable to an attack. Amazon also has a standing policy of giving at least some of the data requested to law enforcement in more than 75% of cases. Amazon says the company is not using customer video footage to improve product recommendations or ad targeting, but last year Google filed for a patent that would use footage to train AI to recognize specific products in customers’ homes so they can better target product recommendations. An example cited by Google was the camera sees a 15-year old boy walking into the living room and turning on the TV. The camera then estimates his age, gender and notes that there is a basketball. Then the TV shows ad for a local basketball camp and announces when the next basketball game is on TV.
Delivery Wars Wage On
UPS is introducing several new delivery services, including pick-up and delivery seven days per week, expanded Saturday schedules for both residential and business accounts and new Sunday pick-up and delivery options. UPS is also making investments to optimize transportation assets, shipping modes and technology resources to help reduce the amount of time packages spend in transit. At the end of July UPS launched My Choice for Business, which is targeted at small and medium sized business. The service enables customer to monitor, plan and control deliveries and outgoing shipments. They also launched UPS Worldwide Economy, a new deferred service designed to make more low-priced services available for cross-border ecommerce transactions that will debut in the US, Canada, China, Hong Kong and the UK. FedEx already announced that beginning in January they will offer ground delivery seven days per week.
FedEx ended its contract with Amazon for ground deliveries at the end of August; FedEx indicated they made the move in order to focus on the broader ecommerce market. FedEx noted that Amazon is developing and implementing in-house delivery capabilities and utilizing independent contractors for deliveries, and thus has become a competitor to FedEx rather than a customer. Some analysts believe that the move by FedEx was primarily designed to let Walmart know that FedEx is willing to join Microsoft and Google in a strategic alliance with Walmart to challenge Amazon. Amazon has been building a fleet of airplanes, trucks and vans that allow the company to control every leg of a package’s journey from warehouse to doorstep.
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