Estimating the Aggregate Economic Impact of the Skilled Labor Shortage:
A Technical Supplement and Executive Summary
Dr. Robert Dietz, NAHB Chief Economist
Purpose
Utilizing the results of the research project requested by the Home Builders Institute (HBI), prepared by Dr. Eric Holt and Bill Ray at the University of Denver, the NAHB Economics team produced the following economic impact estimates of the skilled labor shortage for single-family home building. The findings detailed below indicate that the skilled labor shortage’s impact on the residential construction industry is a multibillion-dollar annual challenge, responsible for the lost production of thousands of newly built homes.
This technical note finds that the aggregate annual impact of the skilled labor shortage in the home building sector is $2.663 billion in terms of higher carrying costs and $8.143 billion in terms of lost single-family home building (19,000 homes). This represents a combined aggregate economic effect of $10.806 billion due to longer construction times associated with scarce skilled labor.