This morning’s Bureau of Labor Statistics (BLS) jobs report showed that job growth in all housing-related sectors–not just construction–is outpacing job growth overall. Several recent key measures of the housing market show clear recovery:
- Asking prices in February were up 7.0%, year-over-year.
- The number of units under construction–which is the measure that construction jobs track closely–was up 26% year-over-year in January.
- The number of conventional home sales (that is, excluding foreclosures and short sales) was up 29% year-over-year in January.
More construction activity means more construction jobs, of course. But the housing recovery is also creating jobs outside of the construction sector, including the manufacturing firms that make lumber and concrete; stores that sell building materials and construction supplies; mortgage and other housing-related financial firms; and real estate agents, brokers, and other real-estate-related businesses. In all of these housing-related industries (see definitions at the end of this post), employment is growing faster than for the U.S. economy overall:
|
Year-over-year |
Current versus peak |
Current versus trough |
Trough versus peak |
|
| U.S. economy overall |
+1.5% |
-2% |
+4% |
-6% |
| Residential construction |
+3.1% |
-39% |
+6% |
-42% |
| Manufacturing (housing-related)* |
+1.7% |
-31% |
+4% |
-34% |
| Wholesale and retail (housing-related)* |
+2.0% |
-13% |
+5% |
-17% |
| Mortgage and finance (housing-related)* |
+10.8% |
-43% |
+12% |
-49% |
| Real estate agents, brokers, and related activities* |
+3.0% |
-4% |
+5% |
-9% |
| All housing-related employment* |
+2.7% |
-28% |
+5% |
-31% |
| *Latest data published for housing-related jobs in manufacturing, wholesale/retail, mortgage/finance, and real estate agents/brokers/related activities—as well as for all housing-related employment—is for January, not February. Note: Peak and trough employment dates vary by sector. All figures are seasonally adjusted. Residential construction employment includes residential specialty trade contractors. Source: BLS. | ||||
Residential construction employment is up 3.1% — twice the overall employment growth rate of 1.5%. But other sectors are seeing job growth, too: employment among housing-related wholesalers and retailers–like building-supply stores–is up 2.0%, and job growth is up more than 10% in mortgage and housing-related finance jobs, too. Employment in all housing-related industries, including residential construction, is up 2.7% year-over-year, though still down 28% from its peak.
The trough-versus-peak, though, shows how much employment rose and fell with the housing market. While employment overall fell 6% from peak to trough, employment in housing-related sectors fell 31% peak-to-trough, with declines of over 40% in both residential construction and mortgage and other housing-related financial businesses. Even though employment in housing-related industries has had a strong recent bounce off the bottom, housing-related jobs are still far below their peak during the housing bubble.
Which NAICS codes did we count as “housing related”? Within construction, NAICS 2361 (residential building) and 238 part 1 (residential specialty trade contractors). Within manufacturing, 321 (wood products), 3273 (cement and concrete products), 3323 (architectural and structural metals), 33312 (construction machinery), and 33711 (wood kitchen cabinets and countertops). Within trade, 4233 (wholesale lumber and construction supplies), 4237 (wholesale hardware and plumbing), 42381 (wholesale construction equipment), and 444 (retail building material and garden supply stores). Within finance, 522292 (real estate credit) and 52231 (mortgage and nonmortgage loan brokers). Within real estate, 5312 (offices of real estate agents and brokers) and 5313 (activities related to real estate).
