Residential construction a bright spot in economic recovery

Home COVID-19 COVID-19-home Residential construction a bright spot in economic recovery

Washington, D.C.—The recovery of the overall labor market continued in October but at a slow pace, according to the National Association of Home Builders (NAHB). In October, 638,000 non-farm payroll jobs were added, and the unemployment rate fell to 6.9%. However, October residential construction employment was 11,500 higher than a year ago, marking the first year-over-year gain since the recession of 2020, the NAHB reported.

Residential construction employment rose by 23,800 in October to 2.9 million as housing remains a bright spot of the recovery. Total construction industry (both residential and nonresidential) employment totaled 7.3 million in October.

After the economy lost 22.2 million jobs in March and April due to the impact of the COVID-19 pandemic and efforts to contain it, about 12.1 million jobs have been created in the past six months, indicating the economy is recovering from the COVID-19 pandemic gradually. In October, total nonfarm employment was 10.1 million lower than its February level.

Meanwhile, the unemployment rate declined by 1 percentage point to 6.9% in October. The number of unemployed persons declined by 1.5 million to 11.1 million. Both statistics have declined for six consecutive months. The labor force participation rate, the proportion of the population either looking for a job or already with a job, increased by 0.3 percentage point to 61.7% in October and 1.7 percentage points lower than the February level.

Leisure and hospitality, professional and business services, retail trade and construction had the significant job gains in October.

Additionally, according to the Household Survey supplemental data, which come from questions added to the Current Population Survey (CPS) since May 2020, in October, 21.2% of employed persons teleworked or worked at home in the last 4 weeks specifically because of the coronavirus pandemic, down from 22.7% in September.

Employment in the overall construction sector increased by 84,000 in October, after a revised increase of 35,000 jobs in September. The number of residential construction jobs rose by 23,800 in October, after an increase of 24,000 in September.

Residential construction employment now stands at 2.9 million in October, broken down as 835,000 builders and 2.1 million residential specialty trade contractors. The six-month moving average of job gains for residential construction is 70,783 a month. Over the last 12 months, home builders and remodelers added 11,500 jobs on a net basis. It was the first time that residential construction employment surpassed the level from one year ago since March 2020, although employment in the sector remains below its total from the pre-recession months of early 2020. Since the low point following the Great Recession, residential construction has gained 951,500 positions.

In October, the unemployment rate for construction workers dropped to 8.2% on a seasonally adjusted basis, from 8.7% in September. After hit 16.1% in April due to the impact of the COVID-19 pandemic, the unemployment rate for construction workers has been trending downward for the past six months.

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