Construction jobs are doing well as predicted, and with various factors coming into play, both new home construction and remodeling levels reveal a lot about the very slowly improving housing sector.
Home construction jobs on the rise
This morning’s March 2013 jobs report shows that construction employment is growing faster than overall national employment, and “relative to the level of construction activity, there are actually a lot of construction jobs,” notes real estate search company, Trulia.com. Residential construction employment grew 3.8 percent in March compared to March 2012, while overall national employment only grew 1.4 percent.
Trulia notes that the number of residential construction jobs per housing unit under construction is actually above the pre-bubble level: there are now 3.7 jobs for every unit under construction, compared to 2.6 in 2001. As the economy continues to see signs of improvement, Trulia notes the sector could see labor shortages.
The caveat to the employment data is that in some metros, construction job growth isn’t keeping up with construction activity. Trulia says These tight markets include San Francisco, San Jose, Washington DC, Denver, Seattle, Orange County, and San Diego. Additionally, the unemployment rate among 25-34 year-olds, the prime age group for housing demand, fell to 7.4 percent in March from 8.5 percent one year ago. Unemployment for 25-34 year-olds is at the lowest level since November 2008. In this age group, 75.4% were employed – up from 74.9 percent one year ago.
Factors that support continued growth
Taking several indicators into account, construction jobs will continue improving alongside housing. The National Association of Home Builders reported a five year high for remodeling in the final quarter of 2011, and a seven year high in the third quarter of 2012. Meanwhile, a new study reveals that buyers have an affinity for newer homes and just last week, the U.S. Census Bureau reported that home construction levels hit a four year high. Combine these together, and get what was once a weak pulse now recovering, and while not yet at pre-recession normal, housing improvement will be led by new home construction.
The challenge for the housing sector remains tight housing inventory levels, and trade groups continue to assert that builders are still struggling with obtaining financing under overly-tight lending conditions. Economists state that these two could ease this year, which means that it is foreseeable that housing jobs could continue to outpace the national employment growth rate and contribute to the national GDP.