1. The Housing Bubble and the Resulting Impact on Employment Kathryn Byun byun_k@bls.gov

2. Commonly Cited Data from Current Employment Statistics (CES)
1) Construction Industry Employment:
Includes work by the construction industry to satisfy demand other than for structures
Does not include employment necessary to satisfy intermediate demand (secondary employment)
Ie Retail Trade industry (Home Depots) Manufacturing industry (building eq. for construction companies)

3. Commonly Cited Data from the Office of Occupational Statistics (OOS)
2) Employment in Construction Related Occupations:
Includes employment in the occupation that satisfies demand other than for building structures
Overlook occupations outside of construction

4. OOSEP Methodology
Industry
Use
Table
Direct
Requirements
Total
Requirements ä ä Y ä
Market
Shares ä
Make
Table
Total
Requirements ä ä X
Commodity
DRT: the amount of each commodity required by a particular industry to produce a dollar of that industry’s output
MS: the percentage of each commodity produced in a given industry
TRT: shows total requirements needed to produce a dollars worth of final demand
Total Requirements Table * Final Demand = Industry Output

5. OOSEP Methodology cont.
Ind. Ouput / Ind. Empl Empl. Multiplier
TRT * Emp. Multiplier = Employment Requirements Table
ERT * FD vector = Industry Employment
Industry Employment Vector * Staffing Pattern Matrix = Occupational Employment
Ind. Empl.: Derived from the Labor model
Staffing Pattern: Based on data collected by State employment agencies.
distributes wage and salary employment in each industry to all occupations used by that industry in order to create its output.

6. Final Demand

7. Final Demand for Construction
(chained 2000 dollars, millions)
Linear trend is just y=ax where x is time from
2007 included

8. Annual Growth Rate

9. Divergence from 1950-95 Trend (chained 2000 dollars, millions)

10. Residential Detail

11. Nonresidential Detail

12. Nonresidential Breakout of Commercial and Health Care

13. Forecasted data for 2016

14. Average Annual Growth Rates (Final Demand)
Historical
Projected
*Implied
Total
3.2%
3.5%
Non-Residential
0.2%
1.3%
0.3%
Residential
5.6%
1.5%
4.1%

15. Employment
ERT = The employment generated by $1 million dollars of final demand
Gives the relative employment impacts of an expenditure throughout economy

16. OOSEP Methodology Final Demand + Intermediates = Industry Output
Ind. Ouput & Ind. Empl Employment Requirements Table
ERT * FD vector = Industry Employment
2006: $1M final demand for construction : 9.5 jobs in the construction industry, 0.43 in water, sewage, and other systems, 0.06 in metalworking machinery manufacturing, 0.06 in retail trade, 0.19 in pipeline transportation, and so on.

17. Disclaimer
The estimates presented from this point on reflect my research alone and are not the official view of OOSEP or the BLS
I will be assuming that the ERT and staffing pattern matrix that OOSEP developed for the aggregate economy also apply to Nonresidential and Residential construction.

18. Employment due to Construction Spending

19. Employment in the Residential Construction Industry (CES data) vs
Employment in the Residential Construction Industry (CES data) vs. Employment due to Demand for Residential Construction (My data) (Wage and Salary Employment, Thousands)
95-05: CES +330,000 (52.4%) OOSEP +2,190,000 (49.7%)

20. Annual Growth Rates
05-06: CES +355,000 (4.8%%) OOSEP -329,000 (-5.0%)

21. Employment during the Housing Bubble versus Trend
This assumes that the ERT stays the same with or without the bubble

22. Could res. trend be shifting up?
More people owning multiple homes
More home owners / Less renters
Replacing a higher percentage of existing structures
Faster population growth (illegal immigration)
More single persons buying homes (higher divorce rate)

23. Nonresidential Construction Related Employment versus Trend

24. Could Nonres. trend be shifting down?
Less need for structures with e-business
Telecommuting
Move from manufacturing to services?
Other reasons?
Census Construction Put-in-place survey may provide some answers

25. 2007 Employment (Assuming 2006 ERT holds)

26. Industry Employment

27. Industries with Construction Related Employment in 2006 (by major sector)
Employment is in all industries but these are the major categories with the highest.
This is for NRES and RES summed because the distr. is very similar.
Distr. very similar throughout so chose just to look at last year of historical data.

28. Residential: industries with biggest gains in employment
Residential
Res. as % of Total
95-05
06-16
1995
2005
2006
2016
Construction
1,943,233
154,570
38.8%
50.8%
48.9%
48.7%
Real estate
127,258
50,538
7.6%
12.9%
11.1%
11.5%
Architectural, engineering, and related services
103,943
34,450
11.9%
16.3%
14.6%
13.6%
Employment services
82,070
1,159
4.4%
5.3%
4.5%
3.9%
Services to buildings and dwellings
59,090
16,507
4.1%
5.7%
4.9%

29. Residential: industries with biggest gains in employment cont.
Residential
Res. as % of Total
95-05
06-16
1995
2005
2006
2016
Wholesale trade
35,587
-21,019
2.1%
2.6%
1.6%
Cement and concrete product manufacturing
30,911
-441
23.4%
31.8%
29.6%
27.6%
Monetary authorities, credit intermediation, and related activities
30,330
-3,472
2.4%
3.0%
2.5%
2.2%
Architectural and structural metals manufacturing
29,755
-8,756
18.9%
24.7%
22.5%
19.4%
Truck transportation
29,429
9,706
4.1%
5.4%
4.5%
4.0%

30. Residential: industries with biggest losses in employment
Residential
Res. as % of Total
95-05
06-16
1995
2005
2006
2016
Retail trade
-173,691
12,547
3.1%
1.8%
1.5%
Other wood product manufacturing
-35,557
-6,961
33.6%
24.0%
21.1%
19.9%
Household and institutional furniture and kitchen cabinet manufacturing
-5,122
-5,865
5.5%
4.7%
3.9%
2.7%
Commercial and service industry machinery manufacturing
-4,539
-573
1.0%
0.5%
Crop production
-4,384
-1,889
1.2%
1.1%
0.9%
0.8%

31. Residential: industries with biggest losses in employment cont.
Residential
Res. as % of Total
95-05
06-16
1995
2005
2006
2016
Logging
-3,998
-3,366
13.2%
14.9%
12.1%
10.7%
Other electrical equipment and component manufacturing
-3,560
-5,209
7.0%
6.6%
6.1%
2.6%
Clay product and refractory manufacturing
-2,756
-1,895
11.3%
10.4%
8.9%
Semiconductor and other electronic component manufacturing
-2,543
-1,431
1.3%
1.0%
0.7%
0.5%
Communications equipment manufacturing
-2,540
-401
1.6%
0.9%
0.4%

32. Nonresidential: industries with biggest gains in employment
NonResidential
Nonres. as % of Total
95-05
06-16
1995
2005
2006
2016
Support activities for mining
63,800
-15,910
88.2%
88.6%
88.8%
88.4%
Amusement, gambling, and recreation industries
3,002
294
0.1%
0.3%
Management, scientific, and technical consulting services
2,406
10,313
2.4%
1.7%
1.5%
Architectural, engineering, and related services
1,696
16,050
8.9%
6.9%
7.0%
6.5%

33. Nonresidential: industries with biggest losses in employment
NonResidential
Nonres. as % of Total
95-05
06-16
1995
2005
2006
2016
Retail trade
-189,316
7,107
2.0%
0.7%
0.6%
Construction
-93,959
79,242
29.4%
21.4%
23.0%
Wholesale trade
-20,274
-11,471
1.6%
1.2%
1.1%
0.8%
Plastics product manufacturing
-11,611
-1,893
4.1%
2.7%
2.6%
2.3%
Architectural and structural metals manufacturing
-9,487
-4,462
14.6%
11.0%
11.3%
9.8%
Construction loses 10% here and gained ~10% due to Res.

34. Nonresidential: industries with biggest losses in employment cont.
NonResidential
Nonres. as % of Total
95-05
06-16
1995
2005
2006
2016
Household and institutional furniture and kitchen cabinet manufacturing
-9,335
-2,703
3.9%
1.9%
1.8%
1.2%
Management of companies and enterprises
-8,162
-8,413
2.7%
2.1%
2.3%
1.6%
Other wood product manufacturing
-7,161
-4,881
9.0%
7.2%
7.3%
6.1%
Telecommunications
-7,083
-183
2.0%
1.1%
Other fabricated metal product manufacturing
-6,610
-3,205
5.3%
3.5%

35. Occupational Employment
(Indsutry Employment Vector * Staffing Pattern Matrix)
Based on data collected by State employment agencies and analyzed by BLS.
Used to distribute wage and salary employment in each industry to all occupations used by that industry to create its output.

36. Occupational Breakout in 2006 (by major sector)
This again is for the sum of NRES and Res as their distr. are very similar at the major level

37. Top 5 occupations NRES RES Sum as % Total 2006 2016 Carpenters 217,832
NRES
RES
Sum as % Total
2006
2016
Carpenters
217,832
236,030
466,321
504,660
46.8%
45.9%
Construction laborers
207,437
225,088
435,019
472,275
52.1%
51.0%
First-line supervisors/managers of construction trades and extraction workers
128,869
137,675
251,917
271,776
49.3%
48.6%
Electricians
117,508
126,535
246,118
264,958
51.6%
51.7%
Plumbers, pipefitters, and steamfitters
87,733
97,510
184,772
205,273
54.3%
54.5%

38. Occupations 6-10 NRES RES Sum as % Total 2006 2016
NRES
RES
Sum as % Total
2006
2016
Office clerks, general
73,542
75,999
157,710
168,167
7.2%
6.8%
Truck drivers, heavy and tractor trailer
83,452
83,169
153,255
154,591
12.7%
11.6%
Operating engineers and other construction equipment operators
68,501
73,433
137,035
147,812
48.5%
48.1%
Bookkeeping, accounting, and auditing clerks
66,193
67,726
136,736
142,832
9.6%
8.9%
Painters, construction and maintenance
59,983
63,594
128,680
136,569
40.8%
38.7%

39. Occupations 11-15 NRES RES Sum as % Total 2006 2016
NRES
RES
Sum as % Total
2006
2016
Construction managers
55,082
60,252
116,899
128,245
35.3%
33.4%
Farmers and ranchers
52,243
37,237
114,666
83,275
15.8%
12.4%
Laborers and freight, stock, and material movers, hand
54,032
48,389
107,360
97,624
6.7%
5.9%
Secretaries, except legal, medical, and executive
50,942
47,943
106,203
102,458
8.1%
7.7%
General and operations managers
54,552
50,872
102,529
98,131
9.1%
8.5%

40. Occupations 16-20 NRES RES Sum as % Total 2006 2016
NRES
RES
Sum as % Total
2006
2016
Cement masons and concrete finishers
48,114
53,397
102,261
113,203
67.9%
67.5%
Heating, air conditioning, and refrigeration mechanics and installers
42,372
46,837
90,508
99,882
45.5%
46.2%
Retail salespersons
38,231
40,720
88,288
93,885
2.8%
2.7%
Janitors and cleaners, except maids and housekeeping cleaners
31,944
32,199
86,456
90,750
5.0%
4.5%
First-line supervisors/managers of retail sales workers
35,789
30,495
79,626
68,920
6.9%
5.7%