The housing market appears to be on the mend, as new home sales, construction spending, and new home construction have all improved in 2012. But construction jobs have shown only anemic growth: the entire construction industry added a mere 2,000 jobs in June, and jobs in residential housing construction have been scraping along bottom for the past two years.
Calculated Risk’s Bill McBride believes that construction jobs will pick up soon. He points out that there’s a lag between housing starts—the number of new projects—and construction jobs, given the long time frame for many construction projects. This was the reason that construction jobs were still up even as the housing market began to crater in 2006 and 2007, and it partly explains the construction employment lag we’re facing now.
What’s more, the official jobs numbers don’t account for the fact that “some construction workers are paid in cash (illegal immigrants), and these workers weren’t counted on the BLS payrolls,” McBride points out. So despite the disappointing jobs numbers in the industry right now, he believes that “construction employment appears to have bottomed, and should add to both GDP and employment growth in 2012.”