Just as Facebook, Amazon, Apple, and Microsoft disrupted the economy during the past decade, housing soon will reassert itself as the main driver of the U.S. economy. Indeed, Conor Sen, portfolio manager of New River Investments, writes on his blog that “housing is going to eat the U.S. economy” by taking labor and capital away from other sectors.
The construction industry’s share of total employment stands at 4.6 percent and has risen to at least 5 percent in just about every business cycle. An increase occurring in the near future seems to be a reasonable assumption given that housing and the construction industry has a lot of growth in front of it thanks to the housing needs of Millennials, the potential for huge infrastructure spending by the federal government, and the current dearth in single-family home construction. Meeting that demand would require an additional 550,000 to 600,000 construction workers. This is a problem because we’re already at record lows for construction unemployment.
“To get back to 1990 levels of male unemployment, we would need essentially every single male unemployed worker who finds a job in the coming years to go into construction. This doesn’t take into account skill, desire, educational level, and geography,” writes Sen.
For more about which industries and regions could see their resources pulled to fill the construction worker void, click here to read Sen’s blog.