A report released by BPC’s Housing Commission details the key role the residential construction industry plays in the nation’s economy and employment base, despite the industry being one of the most cyclical segments of the economy.
The report also describes key trends in industry composition and consumer preferences that will likely be drivers of change as the industry slowly recovers. As a result, the report recommends that any policy designed to spur a short-term housing recovery should also consider the long-term effects on the residential construction industry’s operations, and potential shifts in future housing demand and supply.
Click here to read the full report, entitled, The State of the Residential Construction Industry.
The new report was prepared by Abt Associates Inc., Carlos Martin, PhD, and Stephen Whitlow, MRP, as background for the work of the BPC’s Housing Commission.
Last month, BPC’s Housing Commission released an online dashboard that tracks key market indicators, including industry sentiment. View and share the dashboard here.
The need for development of new housing units to meet growing population demands, and the ongoing maintenance and transformation of existing homes, are some of the reasons why the construction industry will continue to play a significant economic and social role. Ten-year projections for new housing unit demand range from 16 to 18 million. Even with a current unsold inventory of housing units estimated at four million, there is still a gap between supply and projected need ? not to mention physical repair and retrofitting needs. The sheer scale of these physical needs predict a massive future demand for housing, and the industry has and will continue to play a significant role in the national economy.
Read the full report here.
In February, the Housing Commission has released an infographic detailing the housing industry’s historical impact on economic growth.
The graphic tracks private investment in housing in the wake of previous downturns, demonstrating that a robust housing industry helped drive the eventual recoveries. However, since 2008, the industry has made less than half its normal contribution to economic growth. In fact, based on the industry’s average share of Gross Domestic Product (GDP) from 1980 to 2007, the infographic illustrates that 2.3 percent or $350 billion is “missing” in potential growth.