The residential construction industry is constantly evolving, and in 2022, industry experts predict some major changes. The lasting impact of COVID-19 will be felt throughout the year, with shortages in the supply chain causing delays and higher costs for construction companies. Market volatility will also continue to be a factor, as investors shift their focus to different sectors.
Despite these challenges, the industry is poised for significant growth in all sectors of residential development, including single-family and multifamily homes. This growth will require construction companies to adapt and hire new personnel to meet the rising demand.
According to the 2022 North American Engineering and Construction Outlook (Second Quarter Edition) by FMI, the U.S. can expect to see an increase in both single-family and multifamily residential construction. U.S. housing starts have already surpassed projections and have surged to their highest since June 2006.
The single-family residential construction market is expected to grow by 14% in 2022. Affordability will remain an issue for home buyers, as interest rates are expected to rise. This, in conjunction with soaring real estate prices, will likely impact the number of buyers in the market; however, the demand for new homes remains high. Real estate developers will continue to experience high costs for construction materials and skilled labor, in addition to potential delays due to supply chain issues. Attracting and retaining tradespeople and talent will be a key differentiator for many residential construction companies.
Multifamily residential construction is expected to grow by 17% in 2022 with continued forecasted growth over the next five years. Much of this is due to quickly increasing rental costs, which has piqued the interest of investors. The need for affordable housing will continue to be an issue for consumers and the strong demand for rental units will drive multifamily residential development for years to come. Similar to single-family residential construction, new condo and townhouse developments will also require creative recruitment of skilled labour.
Residential Construction Labor Market
There remains a skilled labor shortage in the residential construction industry, and like many other industries, this will continue to be a major challenge faced by companies over the coming year. While the labor shortage is nothing new and has been an ongoing issue, it was further exacerbated by the pandemic.
As we enter new phases of post-pandemic recovery, construction companies will need to get creative with their recruitment strategies to attract and retain workers. These strategies may include offering competitive compensation packages with lucrative salaries, extended benefits, and unique perks.
Companies can also provide training and professional development opportunities to enhance the skillset of their existing staff or create apprenticeship programs with trade schools to help new recruits gain experience while working. Lastly, it is imperative that construction companies engage a recruitment firm that specializes in the industry to ensure they are attracting and hiring the top talent.
These initiatives will be critical in meeting the labor demand for residential construction in the coming years.
Although there are some challenges facing the residential construction industry in 2022, the outlook is generally positive. This is good news for those in the residential construction industry, as well as those considering a career in this field. If you’re interested in a career in residential construction, now is the time to start planning your path.
Residential construction companies that can attract and retain top talent will be best positioned for success. Recruitment firms that specialize in the construction industry can help with this process by identifying qualified candidates and helping companies develop creative recruitment strategies.
What recruitment strategies do you think will be most effective for your company? Tell us in the comments below and reach out to us anytime at [email protected] if you need assistance with identifying and recruiting top talent for your company.