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.
Related Stories
Business
November Data: Custom Architects Weigh In, New Construction Trends, Contractor Confidence, and Material Price Changes
We've collected highlights from a number of data reports published throughout the industry in November
Data & Research
October's Data From Around the Industry
In October, we saw reports on remodeling spending, individual septic system installations, and the widespread use of rate buydowns to sell new homes
Business
Guest Column: What I'm Seeing Out There
Industry expert and advisor Mark Richardson shares stories from the field, from what's changing to what's working
Data & Research
Guest Column: External Forces
NAHB's chief economist on what lies ahead for the custom home market?
Leadership
14 ways to maximize profits
To be more profitable, custom builders must focus on efficiency and cost savings, while looking for opportunities to publicize their work and expertise.
Business
Pending home sales hit highest point since 2010
The National Association of Realtors reported that pending home sales reached their highest point in nearly two years in January, according to a story on HousingWire.
Business
FHFA begins first transactions of REO rental program
The Federal Housing Finance Agency (FHFA) has begun the first pilot transaction of its program to turn foreclosed Fannie Mae and Freddie Mac homes into rental properties, according to HousingWire.
Business
McIlwain: 3 steps to help the housing market
With the housing market in a lethargic recovery, John K. McIlwain of the Urban Land Institute offers three ways to help revive the market.
Financial
Cleveland mortgage settlement money going toward demolition of vacant houses
A large portion of a multibillion-dollar settlement between the state of Ohio and several large mortgage lenders will go toward demolition of foreclosed, dilapidated houses in the Cleveland area instead of struggling families as intended.
Financial
Rising student debt hampers housing growth
A new report from Bloomberg indicates that first-time homebuyers are having difficulty securing loans thanks to student loan debt totals nearing $1 trillion.