I was inspired to see what kind of data was available for the Twin Cities metropolitan area for the Construction Employment from a post on Calculated Risk.
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 is down 2.175 million jobs from the peak in April 2006, but up 53 thousand this year through the September BLS report.
Unfortunately this graph is a combination of both residential and non-residential construction employment…
…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 residential investment didn’t lead the economy this time because of the huge overhang of existing housing units.
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I decided to take a look at our Region’s Construction Employment. Minnesota Department of Employment and Economic Growth, MN Deed, breaks it down to Residential Construction. The data here only goes back to 2005, but it paints a pretty good picture of our situation.
We had a peak Residential Construction Employment of 12,409 jobs in the Twin Cities metro area in July 2006, we have continually lost Residential Construction Jobs since. We are down 58% to 5,157 Residential Construction Jobs as of August 2011. Keep in mind, the impact goes a LOT deeper into the economy than this figure. Think about all the auxiliary business that is created with new housing; appliances, building materials, landscaping, financing, decorating, the list goes on and on.
I am having difficulty drawing the same conclusion as CalculatedRisk based on this information. From our Region’s perspective, we are still bouncing on the bottom with no major improvement in Residential Construction employment. The key difference is that we are comparing Residential Construction Employment to their “Construction Employment”.
If we look at the similar data they are using, we can see that in the Chart below. This is the seasonally adjusted construction Employment for Minnesota, includes greater Minnesota. The construction employment gains do not appear to be coming from the Residential sector at this time.
Are we at the bottom? I believe we are, but I also believe we will be “Catfishing” or “bouncing” along the bottom for a while longer.