Jobs are everything to an economy. Period. Good news is that job growth is now coming back, with an average 188,000 net new jobs created per month thus far this year.
Not all sectors are growing jobs, however, nor are those adding jobs growing at the same rate. This is the first of a series of blogs examining employment growth or loss by sector.
The focus in this installment is on construction jobs. This week it was reported that new housing starts in November hit the highest level since March 2008, reaching a seasonally adjusted annualized rate of 1.09 million dwelling units. The November number is up 30 percent from a year ago. Not surprisingly, the homebuilders confidence level hit the highest mark seen in eight years.
Construction jobs in January 1990 accounted for one out of each 20 jobs. That reached a pinnacle in October of 2007 at one out of every 17.6 jobs and since has fallen to one out of every 23.4 jobs.
New housing starts are now visible in employment numbers for the construction sector. The following graph shows the total U.S. construction employment, monthly, since 1990. The yellow bars indicate when the country was officially in a recession.
The impact of the housing bubble burst is readily visible, with the construction industry shedding approximately two million total jobs from 2008 through 2010, a loss of one out of every four jobs in the sector.
Construction jobs as a percent of total U.S. employment peaked in March 2006 at 5.68 percent, and reached a recent trough of 4.17 percent in January 2011. Construction jobs made up 4.28 percent of U.S. jobs as of November 2013, a number that will rise, no doubt.
Construction job growth is being held back somewhat by limited availability of skilled workers. One of the major headwinds for builders today is finding frame carpenters, trim carpenters, roofers, plumbers, concrete workers, and electricians, since many of the workers employed in the sector at the peak of the housing bubble found employment elsewhere.
Nevertheless, construction is coming back after a half a decade of decline.
Coming up next, the retail trade sector.