Housing-related job growth is expected to accelerate this year and in 2014 as the market heats up, though employment will remain below peak levels for up to another nine years, according to a research note from Goldman Sachs analysts.
Employment growth related to residential investment will accelerate to 25,000 to 30,000 jobs per month, compared with an average gain of about 14,000 per month over the past year, according to Goldman Sachs. Such growth is good for a wide variety of workers. Residential-investment-related employment includes contractors, remodelers, manufacturers, furniture-store employees, real-estate agents and others.
Persistently low interest rates and increasing household formation are supporting demand. Indeed, construction spending is rising, as are trends for home prices and home-builder sentiment. Meanwhile, public home-building companies /quotes/zigman/1496092 /quotes/nls/itb ITB have seen their shares skyrocket over the past year.
It?s clear that the housing market is finally boosting overall U.S. economic growth. Fixed residential investment added to economic growth in 2012 for its first annual contribution since 2005. View charts about housing growth. As residential-investment output continues to grow, it?s expected that firms will increasingly turn to new workers. After all, paying overtime can be expensive, and current construction workers? hours are already above levels at the start of the recession.
But there?s a big jobs hole to fill, and even as growth accelerates, residential investment-related employment won?t hit bubble-peak levels for another seven to nine years, Goldman Sachs analysts estimated. Currently, there are about 6.6 million jobs in residential-investment related industries, down 2.6 million from a 2006 peak. Just looking at residential-construction employment, which accounts for almost one-third of the residential-investment-related category, currently there are 1.4 million fewer jobs than the peak level. Non-construction residential-investment-related employment accounts for the remainder of the residential-investment-related category, and these industries are down 1.2 million jobs from the peak.
?Ruth Mantell
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