Saturday, January 07, 2012

Residential Construction Employment: First increase since 2005

by Bill McBride on 1/07/2012 08:25:00 PM

The graph below shows the number of total construction payroll jobs in the U.S. including both residential and non-residential since 1969.

Construction employment increased by 17 thousand jobs in December, and is now down 2.18 million jobs from the peak in April 2006.

Total construction employment increased by 46 thousand jobs in 2011. This was the first increase for construction employment since 2006, and the first increase for residential construction employment since 2005.

Unfortunately this graph is a combination of both residential and non-residential construction employment. The BLS only started breaking out residential construction employment fairly recently (residential specialty trade contractors in 2001).

Construction Employment Click on graph for larger image.

Usually residential investment (and residential construction) lead the economy out of recession, and non-residential construction usually lags the economy. Because this graph is a blend, it masks the usual pickup in residential construction following previous recessions. Of course there was no pickup for residential construction this time because of the large excess supply of vacant homes.

Construction employment is mostly moving sideways, but at least it was not a drag on employment and GDP in 2011.

This table below shows the annual change in construction jobs (total, residential and non-residential) and through 2011.

Annual Change in Payroll jobs (000s)
YearTotal Construction JobsResidential Construction JobsNon-Residential
2002-8588-173
2003127161-34
200429023060
2005416268148
2006152-62214
2007-198-27375
2008-787-510-277
2009-1053-431-622
2010-149-113-36
2011462026

After five consecutive years of job losses for residential construction (and four years for total construction), construction employment increased in 2011.

In addition residential investment has made a small positive contribution to GDP in 2011 - also for the first time since 2005.

Earlier:
Summary for Week Ending January 6th
Schedule for Week of Jan 8th