NAHB Chief Economist Robert Dietz recently provided this housing industry overview in the bi-weekly e-newsletter Eye on the Economy.
Economic growth for 2021 is expected to post the best GDP expansion rate since 1984. However, forecasters have been revising down their estimates.
A combination of factors has diminished the bloom of the economic rose: the delta variant wave (although that wave is now easing), concerns over government spending and higher taxes, and ongoing supply-side challenges that are contributing to inflation and point to higher interest rates. As a result, consumer confidence fell to a seven-month low in September.
The Bureau of Labor Statistics employment report for September registered a gain of only 194,000 jobs. Forecasters, including NAHB, were looking for a gain closer to 500,000.
As the unemployment rate fell below 5% for the first time since the recession of 2020, the ongoing labor shortage will grow tighter unless the labor force participation rate recovers and more individuals look for work. Indeed, the number of open, unfilled jobs in the construction sector now totals 344,000.
As of September, residential construction workers totaled 3.1 million, broken down as 882,000 builders and 2.2 million residential specialty trade contractors. Over the last 12 months, home builders and remodelers added 136,300 jobs on a net basis.
Since the low point following the Great Recession, residential construction has gained nearly 1.1 million positions. And more will be needed as the sector continues expanding to meet demand.
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