I can offer some anecdotes from the metro Boston region, which seem to be consistent with FRED data on construction employment in Massachusetts. Take all of this with a grain of salt, particularly since the entire state is a deeply distorted and dysfunctional real estate market.
-Construction labor (which I don't know to decompose into residential, commercial, etc...) seems to have rebounded from the Great Recession. However, construction volume prior to that period reflected repressed demand because of the regulatory environment. Every contractor I deal with never has the right amount of help which ultimately leads to persistent scheduling issues.
-Supplies usually get to jobs when they're needed but there's not much price softening except for framing lumber.
-The great promise of office to housing conversion does not seem to be materializing. Energy efficiency requirements, historical reviews, and affordable housing requirements don't make this attractive for large scale efforts by developers.
I like your hypothesis of 5% NGDP followed by a reduction to 4% in 2008. I also suspect it's very hard to get residential construction pushed all the way down to 0% today. Too much positive inertia. So I suspect it may be near impossible now to push homebuilding below 600,000 units/yr. Fed interest rate tools get much less effective at these edges.
I am a small residential production builder and we’re still experiencing increases from suppliers. Not as much on the labor side but on the goods side and my suppliers say it could be as much as 12 months before this starts to abate.
I can offer some anecdotes from the metro Boston region, which seem to be consistent with FRED data on construction employment in Massachusetts. Take all of this with a grain of salt, particularly since the entire state is a deeply distorted and dysfunctional real estate market.
-Construction labor (which I don't know to decompose into residential, commercial, etc...) seems to have rebounded from the Great Recession. However, construction volume prior to that period reflected repressed demand because of the regulatory environment. Every contractor I deal with never has the right amount of help which ultimately leads to persistent scheduling issues.
-Supplies usually get to jobs when they're needed but there's not much price softening except for framing lumber.
-The great promise of office to housing conversion does not seem to be materializing. Energy efficiency requirements, historical reviews, and affordable housing requirements don't make this attractive for large scale efforts by developers.
I like your hypothesis of 5% NGDP followed by a reduction to 4% in 2008. I also suspect it's very hard to get residential construction pushed all the way down to 0% today. Too much positive inertia. So I suspect it may be near impossible now to push homebuilding below 600,000 units/yr. Fed interest rate tools get much less effective at these edges.
I am a small residential production builder and we’re still experiencing increases from suppliers. Not as much on the labor side but on the goods side and my suppliers say it could be as much as 12 months before this starts to abate.
Interesting. Thanks for the input.
Any particular items that are especially creating bottlenecks? Or is it a moving target?