Will post COVID demand for Tradesmen increase?

In April 2020, the unemployment rate reached 14.8%—the highest rate observed since data collection began in 1948. Ref: Congressional Research Service

Some of the hardest hit industries were;

  • Personal Services

  • Leisure and hospitality

  • Construction

  • Self-employed workers

The Tradesman industry (which is broad in scope) would be included within these hard hit industries.

However, There are several bright stars on the horizon. The combination of retiring baby boomers plus a 'booming' Real Estate market will see growth and opportunities for the Tradie industry.

This post explores why they will benefit the Tradie industry.

Bye Bye Baby Boomers

The U.S. has both a significant skills gap and, a large number of jobs unfilled within the Tradesman industry.

There are nearly half a million more jobs available in the skilled trades than workers with the skills to fill those roles. Within a decade, that number is expected to rise to two million.

Why is this happening?

The reason is rapidly retiring Baby boomers – those born between 1946 and 1964. They are leaving openings for people with trade skills but there are not enough skilled job replacements for the number of rapidly retiring baby boomers.

Supporting data

The number of baby boomers retirements has been increasing by about 2 million each year since 2011. The retirements jumped by 3.2 million during 2020.

During 2020 baby boomer retirements created 31 million vacant positions, with 74% of firms predicting a shortfall of qualified, skilled Tradie workers. Ref: Adecco

By 2030 all baby boomers would have reached at least age 65.

The shear number of retiring baby boomers are causing a massive shortage of skilled Tradies. This deficit in jobs is also significantly driving their wages up.

Other factors affecting the skilled trade shortage.

  • Many young folks today;

  • have never held a power tool and don’t want to get their hands dirty doing what they believe is manual work.

  • are more interested in tech. jobs and seeking glamorous, cushy office jobs.

  • A perception that it’s a white man’s game that puts both colored and minority groups off.

The combination of skills shortage and rising wages leaves a lot of space available for existing skilled employed Tradies to quit their jobs and become self-employed.

Download a copy of the Guide to see how to do this at a minimal cost.

The Booming Real Estate market

During the last decade, the number of new homes built was about half compared with the previous decade. Consequently, the housing market has struggled to keep up with demand during the last decade.

Adding to this housing demand are the current supply chain issues that are manifested by increased lead times for products and increased materials prices.

Other factors affecting the demand for Real Estate.

  • Families are moving away from city centers to the suburbs and beyond;

  • COVID introduced workers to 'work from home' and it has gained traction. Both businesses and workers benefit; companies can reduce office lease costs, and employees save traveling costs/time plus enjoy a better lifestyle.

  • Families feel safer from COVID living away from the city centers.

  • Continued relatively low-interest rates.

  • Despite supply chain costs issues, construction technology improvements are driving building costs down.

  • Families spend less on travel due to covid lockdown travel restrictions, and housing is a good investment.

There are not enough houses to satisfy demand, and despite the supply chain issues, demand for new builds is forecast to increase.

Is there really a building boom coming?

Towards the end of 2019 the single-family housing builds started gaining momentum. Some of the reasons for this are explained above.

Looking forward, experts are predicting another expansion in the housing market. Single-family house builds rose 11 percent in 2020 and projected to rise another 7 percent in 2021.

These economic factors show positive times ahead for a skilled tradesman.

Construction is an 'other' economic indicator that has a significant effect on the economy.

To quote directly from a 2021 Forbes article by Frank Sorrentino – Construction turned Banker.

Amid an ongoing housing market boom, the construction industry added 110,000 jobs in March, recovering over 80% of the jobs lost throughout the COVID-19 pandemic.

Residential new home construction has over a 3X multiplier effect on U.S. GDP. Essentially, each dollar put into a new home being constructed recirculates and brings the overall economy $3 in value.

A new analysis from Freddie Mac found that approximately 4 million new homes will be needed to meet existing demand, representing a 52% increase compared with 2018. This gap presents local builders with an immediate opportunity to accommodate this unmet demand while also generating economic activity.

Frank also says that the construction industry is growing its efficiency by adopting cloud-based digital bandwidth, robotics, drones, and other technologies.

Data sourced from another Jan 2021 Forbes Article.

There were 430,000 new single-family builds during 2011. Each subsequent year the number has steadily increased to 887,000 builds. New constructions of single-family homes are forecast to exceed 1 million during 2021.

All this activity signals a strong resurgence for skilled tradesmen, with a newfound optimism for the sector emerging from the COVID-19 pandemic.

A skilled tradesman is perfectly positioned to ride the wave of this optimism by becoming self-employed and starting their own business. Most tradesmen can operate from home because they work at their customer’s job site. Their startup costs are relatively low a vehicle plus tools that they are likely already own.

The Guide explains how to establish your own business, move it online, and successfully promote it at a minimum cost.

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