Demographic gaps are a potent force in the construction industry’s labor shortage and the limited supply of homebuyers, economists said during a recent event forecasting the future of housing.

The industry has added 18 million workers age 55 or older since 2000. However, only 1 million workers younger than 55 have joined the industry during the same span.

“This is a generational challenge,” said Robert Dietz, chief economist of the National Association of Home Builders. “We’ve got to find ways to build more with less.”

The demographic bulge is an echo of the post-World War II baby boom, Dietz said. Millennials also represent a large generation, while Generation Xers are few in number. The same demographic trends are playing out around the world, tempering growth in many nations, he said.

Dietz’s comments came Friday during the Home Builders Association of Metropolitan Portland‘s 2020 Housing Forecast, at the Oregon Convention Center. Speakers offered a snapshot of housing construction locally and nationally. Generally, contractors have a backlog of work with the economic expansion now 10.5 years old – a lengthy run that is unprecedented in American history.

The economists did point to some troubling trends. Job growth, for one, is slowing.

“It’s hard to have employment growth when there’s nobody to hire,” said Jerry Johnson, principal of Johnson Economics in Portland. “You’re at the shallow end of the employment pool.”

Still, the panel of speakers agreed that the economy has some legs.

“We feel the next 18 months should be pretty good,” said Doug Wirges, CEO of Parr Lumber Co., which sponsored the event.

Wirges drew laughs by comparing a recession to a kidney stone: It will pass, it will hurt, and liquidity can only help you.

Susan Brown, senior vice president for home lending at Umpqua Bank, said financing of alternative dwelling units, or ADUs, is an opportunity for the industry that the bank was early to jump on.

Johnson pointed to Portland’s Residential Infill Project, which would allow for construction of fourplexes on single-family properties. The City Council is due to consider the zoning changes in December and January.

“Somebody is going to be building these to sell to investors,” he said.

The discussion regarding “missing middle” housing is somewhat misleading, Dietz said. The greatest need, he added, is for small, single-family detached homes.

The economists also said there’s an opportunity for growth in “panelized” or otherwise prefabricated homes, which now make up less than 3 percent of single-family home starts.

“We’re seeing discussion – it’s not showing up in the data,” Dietz said.

The battle for homebuilders will be to build the types of smaller, more affordable homes that millennials want and can buy, Johnson said.

“That’s the future of the market,” he said. “End of day, we need to find a way to deliver the product that’s suitable to them.”

Johnson also signaled a warning sign for Realtors, whose traditional role as matchmaker in residential sales has been weakened by a wealth of online information, services and apps that can match buyers and sellers at lower cost.

“The Realtors are hanging on, but their rationale is going to get weaker,” he said.

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