New Construction Jobs Support Overall GDP

Home building generates a substantial amount of money for local governments and the federal government just by the nature of the industry.  According to the National Association of Home Builders, approximately 90,000 different governments receive approximately $111 million in taxes and fees from the construction and building of 1,000 single-family homes.

Sub-Contractors Contribute Greatest Share

In addition to the governments making a substantial amount of money from home building,

sub-contractors also are reported to make consistently higher wages because of home building.  One of the reasons for this is that sub-contractors actually do the work themselves instead of hiring the jobs out to employees.  Because sub-contractors make up the majority of the workforce when building a new home, the taxes on profit then paid by these sole proprietors also contribute greatly to the overall economy.

Tax Breakdown

The amount of taxes paid to the federal government is comprised mainly of income taxes and social security equaling an amount of $74.4 million.  State and local income taxes comes to $10.3 million, and city and county taxes equal approximately $6.9 million.  Other taxes consisting of impact fees, permit fees, and other fees for new construction bring in a total of $13.7 million.

A breakdown of industries which bring in the revenue shows that construction has the most jobs, and other affiliated companies related to construction such as manufacturing, bring in other revenue.  Other affiliated businesses include trade, transportation, warehousing, finance, insurance, real estate sales, rental and leasing, and professional, management, and admin services. A total of 2,975 jobs are created from building 1,000 single-family homes based on full-time jobs over one year.

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Employment is Rising and Single-Family Homes Are Under Construction

New jobs reports and the falling unemployment rate have brought about a positive economic outlook of many Americans in the U.S. The employment growth is a big reason for both the real estate and housing industries’ latest boom both with new construction homes for sale as well as resale homes for sale. The strong job reports have encouraged many to believe there is not a “double dip” recession looming so many are relieved and feel confident in purchasing a new home. Everything from apartment buildings (multi-family homes) to single-family homes are under construction everywhere you turn in the country.

The rise in household formation by millenials as well college grads that have finally been able to get a job has led to new houses being built which has attracted workers in the construction industry. Employment in the field of construction reflects an average of 20% of the jobs that have been recently created. The American Association of General Contractors showed 80% of construction firms planned to hire this year. JOLTS survey showed an increase of 36% in the number of construction job openings year-over-year.

Mark Vintner, senior economist at Wells Fargo Securities says, “Home building will be one of the economy’s largest upside surprises in 2015.”

This is very good news for those looking for employment in the construction industry. Contractors are desperately seeking those who are skilled in all areas of construction which include part time and full time employees as well as sub-contractors. Vintner points out that overall, nationwide, there is a shortage of skilled construction workers. The American Association of General Contractors also reports that 87% of construction firms are having difficulty filling positions. Moody’s Analytics Adam Ozimek believes the shortage is due to lack of wage growth in the construction industry. However with the decline in unemployment, the job market will soon become an “employees’ market” instead of a employers’ market, which should drive up competitive hourly and salary wages. For the construction industry, this should put many out-of-work carpenters, builders, plumbers, electricians, and day laborers back to work with a healthy salary. Ron Lee Homes has been following this construction employment trend in St. Tammany Parish by expanding its services to include remodeling as well as custom home construction. To build your new, custom home today, Contact Us at 985-626-7619 or E-mail Info@RonLeeHomes.com.

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