In late 2008, oil and gas pipeline construction workers earned $0.46 per hour more than new home framing contractors. Today, they earn $8.15 more per hour. It’s no wonder labor is tight in the new home market, especially in Texas and Denver, the closest major markets to North Dakota. Since 2008, framing contractor wages have fallen 8%, while oil and gas pipeline construction wages have swelled by 20%.
Since the end of 2007, oil and gas construction grew by 223,000 jobs, while residential construction employment fell by 743,000 jobs. That still means that there are at least 500,000 former construction workers not in the oil industry who need to be enticed to return to the residential construction market. Touring the Washington, DC, Charlotte, Atlanta, Austin, and Phoenix housing markets recently, the triple-digit thermometer readings reminded me just how difficult home construction can be. We will be watching the inevitable wage increases carefully, as rising wages will have the additional impact of reducing the price home builders will pay for land.
Note: We are defining energy sector and residential construction as follows: Energy sector = oil and gas pipeline construction + oil and gas extraction + support activities for oil and gas operations Residential construction = residential building construction + residential specialty trade contractors