Industrial Insight

skilled labor shortage in construction? | January 21, 2013

The real worry is inflation

As investors realize the market’s deflation phantoms aren’t real, they’ll notice a potentially fearful rise in inflation. That will give the bond market jitters.

By Bill_Fleckenstein Fri 3:09 PM

On that score, an article by Anjli Raval in Wednesday’s Financial Times headlined, “Labour shortage holds back builder Lennar” was most instructive. Raval began: “Lennar (LEN +0.33%) said labour shortages and higher construction material and land costs were challenges for the US homebuilder even as it reported a surge in fourth-quarter earnings.”

The writer went on to note, “The scarcity of construction labourers, as well as plumbers, electricians and carpenters among others that are the backbone of the residential construction industry, has resulted in projects facing delays . . . . The company said additional charges and higher prices for construction materials such as lumber, drywall and concrete had increased the average cost of building a new home by $1,600.”

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I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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