The federal government's immigration enforcement actions this year have added stress to a construction industry that was already struggling with rising costs.
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Nearly two-thirds of builders last month said immigration enforcement has impacted their labor force, The Wall Street Journal reported, citing a John Burns Research and Consulting survey. The number was up from 23% in March and 13% a year ago.
The federal government has conducted immigration raids on construction sites as part of its ramped-up enforcement efforts since President Donald Trump took office early last year. In September, an Alabama judge ruled that federal officials would need a warrant to enter construction sites for this purpose, finding that the federal government was likely violating the Fourth Amendment rights of one worker who had been detained twice on a construction site.
The Trump administration argues that deporting immigrants will help bring down housing costs, and it urges builders to hire U.S. citizens.
These immigration raids have specifically hit companies in the roofing, painting and framing sectors, the WSJ reported.
The labor shortage is driving up construction prices as demand for skilled labor continues to rise.
In some cases, builders reported a 70% reduction in available workers for certain jobs, forcing the remaining crews to double their rates, the WSJ reported. The median increase in the cost of labor last month was 4.2%, according to the National Association of Home Builders.
“We’re almost dead in the water because our workforce is gone,” Scott Brannock, president of the Northeast Florida Builders Association, told the WSJ.
The development of data centers has created its own labor bottleneck, as more specialized workers like HVAC technicians and electricians are flocking to these higher-paying jobs, causing delays in other sectors.
The rising cost of materials has also made it difficult for construction projects to pencil out.
Building material price inflation neared a four-year high in September, with final demand prices up 6.3% from a year ago, according to the NAHB. Material costs for new residential construction were up 1.8% over the month and up 9.7% from the last year.
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