Home Building Employment across States and Congressional Districts in 2022

2024-05-30T07:33:15-05:00

According to the latest 2022 ACS, 11.2 million people, including self-employed workers, worked in construction in 2022. NAHB estimates that out of this total, 4.7 million people worked in residential construction, accounting for 2.9% of the US employed civilian labor force. Home building in the Mountain Division, as well as in Florida, stand out as generating a significantly higher share of local jobs, with residential construction generating close to 6% of all jobs in Idaho. NAHB’s analysis also identifies congressional districts where home building accounts for particularly high employment levels and share of local jobs. Not surprisingly, the most populous state—California—also has the most residential construction workers. Over 650,000 California residents worked in home building in 2022, accounting for 3.4% of the state employed labor force. Fast-growing Florida comes in second with 466,000 residential construction workers. The state stands out for registering one of the fastest growing populations since the start of the pandemic, which undoubtedly boosted housing and construction workforce demand. Florida’s large stock of vacation and seasonal housing further boosts demand for residential construction workers. As a result, in Florida, residential construction workers account for a relatively high 4.4% of the employed labor. Even though this share is well above the national average (2.9%), it is significantly lower than in 2006, when Florida registered the highest share among all 50 states and the District of Columbia, at 6.5%. Similar to Florida, fast-growing states with a high prevalence of seasonal, vacation homes top the list of states with the highest share of residential construction workers in 2022. Three states in the Mountain Division – Idaho, Utah, and Montana – take the top spots on the list with 5.9%, 5.4% and 4.8% of the employed labor force working in home building. Florida is next on the list with a share of 4.4%. In addition, ten other states register shares of residential construction workers that approach 4%: Maine (3.9%), Wyoming (3.8%), Vermont (3.8%), Washington, Colorado, New Hampshire, Nevada with 3.7%, and Arizona, North Carolina, and Oregon with 3.5%. As of 2022, the average congressional district has about 10,800 residents working in residential construction, but that number is often significantly higher. In Idaho’s 1st Congressional District, over 29,000 residents are in home building and Idaho’s 2nd Congressional District has close to 25,000 residents working in home building. Eight other congressional districts have over 20,000 residents working in residential construction – Florida’s 26th (24,700), Utah’s 4th (24,500), Utah’s 2nd (24,300), Florida’s 17th (21,400), Utah’s 1st (20,600), Florida’s 7th (20,500), California’s 29th (20,400), and Colorado 8th (20,100). By design, Congressional districts are drawn to represent roughly the same number of people. So generally, large numbers of residential construction (RC) workers translate into high shares of RC workers in their district employed labor forces.  Idaho’s 1st registers the highest share of residential construction workers in the employed labor force, 6.4%. Two districts in Florida (Florida’s 17th and 26th) are next on the list with shares of 6.2%. Utah’s 2nd (5.7%) and California’s 29th (5.5%) also register shares far exceeding the national average of 2.9%.  At the other end of the spectrum there are several districts that contain parts of large urban areas: the District of Columbia, the 12th of New York, located in New York City, Pennsylvania’s 3rd that includes areas of the city of Philadelphia, Illinois’s 7th and 5th, Georgia’s 5th that includes most of Atlanta, and among others, Louisiana’s 2nd that contains New Orleans. Most residents in these urban districts tend to work in professional, scientific, and technical services. The District of Columbia stands out for having the lowest number of RC workers, with less than 1,000 residing in the district. At the same time, it has a disproportionally large share of public administration workers. The 12th District of New York and the 7th District of Illinois are home to a very large group of finance and insurance workers. Meanwhile, in Pennsylvania’s 2nd, more than a third of residents work in health care and educational services. The NAHB residential construction employment estimates include self-employed workers. Counting self-employed is particularly important in the home building industry since they traditionally make up a larger share of the labor force than in the US total workforce. The new NAHB home building employment estimates only include workers directly employed by the industry and do not count jobs created in related industries– such as design and architecture, furniture making, building materials, landscaping, etc.  As a result, the estimates underestimate the overall impact of home building on local employment. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Home Building Employment across States and Congressional Districts in 20222024-05-30T07:33:15-05:00

Construction Self-Employment at 23%

2024-05-20T08:14:44-05:00

Close to 23% (or over 2.5 million) of workers employed in construction are self-employed, according to the 2022 American Community Survey (ACS). As industry payrolls expanded in 2022, the share of self-employed inched down. However, the share remained higher than it was in 2019, before the pandemic rattled the labor market. Even though the COVID-19 pandemic boosted self-employment across all industries, construction self-employment rates remain significantly higher than an economy-wide average of 10% of the employed labor force. Compared to the elevated readings of the Great Recession, when over a quarter of the construction labor force was self-employed, the current construction self-employment rates are lower. This is consistent with the counter-cyclical nature of construction self-employment. Under normal circumstances, self-employment rates rise during an economic downturn and fall during an expansion. This presumably reflects a common practice among builders to downsize payrolls when construction activity is declining. In contrast, builders and trade contractors offer better terms for employment and attract a larger pool of laborers to be employees rather than self-employed when workflow is steady and rising. Stacking construction self-employment rates against NAHB’s measure of labor shortage – the share of builders reporting shortages averaged over the nine trades (carpenter-rough, carpenter-finished, electricians, excavators, framing crews, roofers, plumbers, bricklayers/masons, and painters) – reveals that self-employment becomes less prevalent when construction labor shortages worsen. Thus, persistent labor shortages of the last decade is another contributing factor and helps explain why self-employment rates have been trending lower. The COVID-19 pandemic disrupted this natural cycle with self-employment rates rising during the post-pandemic housing boom, when the labor shortages became particularly acute. It is likely that higher self-employment in construction post-pandemic reflects divergent trends within the industry – a faster V-shape recovery for home building and remodeling and a slower delayed improvement for commercial construction that is less dependent on self-employed. It is also possible that some construction employees laid off during the COVID-19 recession of early 2020 became self-employed. Similarly, and consistent with economy-wide “Great Resignation” trends, some workers might have chosen self-employment because it offers more independence and flexibility in hours, pay, type and location of work. Given the widespread labor shortages in construction, securing a steady workflow was less of a concern for construction self-employed in post-pandemic times.  Since the 2020 ACS data are not reliable due to the data collection issues experienced during the early lockdown stages of the pandemic, we can only compare the pre-pandemic 2019 and post-pandemic 2021-2022 data (hence the omitted 2020 data in the charts above). As a result, it is not clear whether self-employed in construction managed to remain employed during the short COIVD-19 recession or recovered their jobs faster afterwards, compared to private payroll workers.  It is also unclear whether the booming residential construction sector attracted self-employed workers from other more vulnerable or slow recovering industries, including commercial construction.  Examining cross-state variation provides additional insights into construction self-employment rates. Montana and Nevada constitute two opposites, with Montana registering the highest (36%) and Nevada showing lowest (11%) self-employment rates in construction. The substantial differences likely reflect a predominance of home building in Montana and a higher prevalence of commercial construction in Nevada.  The New England states are where it takes longer to build a house.  Because of the short construction season and longer times to complete a project, specialty trade contractors in these states have fewer workers on their payrolls. The 2012 Economic Census data showed that specialty trade contractors in Montana, Maine, Rhode Island, Vermont, Idaho, and New Hampshire have the smallest payrolls in the nation with five to six workers on average. The national average is close to nine workers. As a result, independent entrepreneurs complete a greater share of work, which helps explain the high self-employment shares in these states. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Construction Self-Employment at 23%2024-05-20T08:14:44-05:00

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