High Demand and Limited Supply Drive Construction Labor Costs Up
The law of supply and demand is one of the basic drivers of construction economics. It is integral to cost and profit for any construction business from materials suppliers to on site labor and contractors. Labor supply is closely tied to the demand side of the curve and the supply of skilled craftsman is fast becoming an issue that will drive the cost of labor up until a solution can be found. Today we are witnessing the long-term results from those programs that encouraged more students to go to college and discouraged students from taking those courses that lead to the building trades. A recent article in one of the Houston area community newspapers pointed out just how difficult the labor supply issue is becoming in Katy located on the west side of Houston and one of the fastest growing suburbs in the region. As the article titled, “Katy’s cost of construction” reports, “Fewer technical students, undocumented labor play role in ongoing labor shortage.” The a...