If you want an industry with a great long-term outlook, consider construction. I have run the math. Even with the most conservative of assumptions, household formations will boom over the next 15 years, and we will need well in excess of 1.5 million homes built per year to meet the demand. That is 50 percent more than we built last year. All of my builder clients tell me there is a huge shortage of talent—both blue collar and white collar.
I could go on and on summarizing why the housing market has been slow to recover and why we will not hit 1.5 million homes this year or next, but that is not the point of this article.
Look at the US population today, shown by decade born below. Those born between 1989 and 1994, who are currently 21–26 years old, are the largest 5-year cohort out there. Yes, their struggles to gain full-time employment at a fair wage and to pay off student debt have been well documented. What has not been sufficiently documented is that the majority of them will still leave the nest, marry, have children, and need a place to live.
There are some very exciting industry developments too. We like to group the many, many factors that impact housing demand into four categories:
- Government involvement. From immigration policies to mortgage policies to investment in urban areas or infrastructure, government will continue to play a major role in housing demand. There is a tremendous need to help government with their policy decisions.
- Technology. Whether it is improved health care extending life, IVF technology allowing babies later in life, Internet access enabling knowledge workers to live wherever they want, or construction technologies making new homes more energy efficient, technology continues to evolve. These changes will affect where people live, how long they live, and in what type of home they will live.
- Economy. You need a good-paying job to form a household, and the Great Recession was so damaging that there are still fewer full-time employed people than 6 years ago. However, regional economies like Seattle, Silicon Valley, Denver, and Dallas are booming right now, and signs point to continued strong growth in Texas, Arizona, Nevada, Florida, Georgia, and throughout the Southeast, where jobs are plentiful and housing is affordable.
- Social shifts. Television has done a great job depicting household life over the decades, from Leave it to Beaver in the 1950s and 1960s to Modern Family. Family structures are changing, and thus the type of home people desire has shifted as well. One great example is the surge in immigration in the last 25 years (more green cards issued than the prior 70 years), which is helping drive an increase in homes designed for multiple generations.
In summary, my home builder clients have been complaining for 3 years about a shortage of qualified labor, both blue collar and white collar. Our research shows that the industry will grow 50 percent over the next few years, and demographic housing demand will maintain that level for a very long time. If you want a great career, consider the many ways you can become involved in the construction industry.
