According to information from the National Association of Home Builders, new housing construction was up 10.8% as 2015 ended, with single family starts up 10.4%. Further, a survey from the Associated General Contractors of America indicates 71% of construction firms plan to expand their payrolls and add employees.

The survey, also released in partnership with Sage Construction and Real Estate did point to tempered payroll expectations, however, with 63% of the firms expecting modest increases in workforce between 1% and 25%. Among the 30 states with large enough sample sizes, 95% of firms in Kansas are planning to bolster their payrolls in 2016, representing the most ambitious expectations of any state. However, 25% of firms in Pennsylvania expect to reduce headcount, the least ambitious of any state.

“These numbers [of new housing projects] are in line with what our members are telling us that housing markets are improving, but lot and labor shortages continue to be a problem for many builders,” says NAHB Chairman Tom Woods of the new housing construction statistics.

The northeast saw the starkest shift in combined single-family and multifamily starts with a 24.4% hike in December, compared to a 12.4% dip in the Midwest, 7.6% in the west and 3.3% in the south.

“The gradual increase in housing production for 2015 mirrors our forecast and sets the stage for continued growth in 2016,” says NAHB Chief Economist David Crowe. “Strong job growth, rising consumer confidence and pent-up demand will keep housing on an upward trend.”

But, as the AGC survey indicates, firms looking to capitalize on an improving market are struggling with a shortage of qualified workers. According to the survey, 70% of the firms included in the survey claim they are having difficulties finding “either salaried or craft professionals.” And, 69% of the respondents indicate conditions are not expected to improve over the next year.

In order to entice new workers, firms are increasing pay and offering more benefits, according to the report. Nearly half the respondents increased base pay, 30% offered incentives or bonuses and 23% increased contributions to employee benefits. Almost half of the firms reported they plan to invest more in training and development, as well.

Firms also expect additional costs generated from rising healthcare premiums. Many reported increases in healthcare contributions, 79% last year, and 81% expect additional healthcare costs in 2016.

“What is particularly striking about the findings on worker shortages is that they are consistent with the responses from last year’s Outlook,” says Ken Simonson, chief economist for the AGC. “In other words, after a year of raising pay and increasing benefits, contractors remain as worried about the lack of qualified workers as they were at the beginning of 2015.” Information on the survey and additional statistics can be found here.