How an Immigration Downturn Has Contributed to the Construction-Worker Shortage

The U.S. construction industry has lost more than half a million Mexican-born workers since 2007, contributing to a labor shortage that’s likely to drive up home prices, according to a new analysis.

Increasingly restrictive immigration policies and better opportunities abroad have resulted in less Mexican immigration to the U.S. for such work, according to a report released Monday by home-building analyst John Burns Real Estate Consulting Inc.

Without taking a position on immigration policy, the analysis firm examined Commerce Department data to determine that there now are 570,000 fewer Mexican-born construction workers in the U.S.—both in the residential and commercial sectors—than at the construction industry’s peak in 2007. Mexican-born construction workers in the U.S. numbered 1.32 million last year compared with 1.89 million in 2007, Commerce data show.

Burns chief executive John Burns and his firm’s demographer, Chris Porter, conclude that many of those workers who went back to Mexico during the downturn haven’t returned to work in the U.S. due to tighter immigration controls—both for those entering legally and those not—and comparable job opportunities in some Mexican states with improving economies.

That doesn’t bode well for a home-building industry that increasingly has cited labor shortages among the factors deterring greater production of late. Granted, U.S. construction starts on single-family homes so far this year amount to an 11% increase from the same period a year ago. Even so, the pace of construction starts in August still amounted to only about half of the average annual output in the most recent normal market of 2001 to 2003.

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