Canadian Contractor

John Bleasby   

How many sub trades does it take to build a house?

Canadian Contractor

A U.S. survey of house construction sub trade employment likely parallels the Canadian experience

Sounds like the classic joke: “How many engineers does it take to change a light bulb?” A recent survey by the National Association of Home Builders in the United States has determined that builders use an average of 22 sub trades to construct a house.  Two thirds of the respondents said that in fact they sub-contract 75% of the work on a typical single family home.

“The report noted the most common jobs that builders sub out include work on security systems, carpeting, HVAC, electrical wiring and plumbing. The least common jobs delegated to subcontractors include work on finished carpentry, interior doors, exterior siding, framing and exterior doors/windows.” according to Construction Dive magazine (U.S.)

These numbers have varied slightly over the past few decades, from  70% sub-contract work in the ‘70’s and ‘80’s, rising to 84% in 2005, and  then falling back to current levels. And while one might expect smaller building companies to subcontract the most work, it is in fact the larger builders who actually do. “Builders with more than an average of 25 annual starts reported subcontracting out 87% of the total work, while builders who had between 5 and 24 starts subbed out 81%, and those with less than 5 starts used only 77% sub work.”

These findings lead to some interesting observations about the residential construction industry in the United States and (very likely) in Canada.

  1. The more complex and upgraded nature of amenities built into a house today versus a house of the ‘80’s. This implies more specialised skills for such items as HVAC systems, home electronics, kitchen gadgetry, and bathroom finishes.
  2. An on-going shortage of these specialised skills.
  3. The evolving nature of the employer-employee relationships, given government and regulatory mandated programmes and benefits that affect a variety of payroll deductions and overhead administrative costs. This has influenced some builders to subcontract certain trades rather than add to employee rolls. At the same time however, there is a risk for subcontracted trades who work almost exclusively for one builder to be deemed a “joint employee” for tax purposes after the fact. This might result in their questioning the continued benefit of working independently.

 

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