Study Shows Housing Industry’s Economic Output Down 80 Percent Since 2005
Sector’s 2009 economic impact slightly less than originally estimated earlier this year
SACRAMENTO, CA – August 16, 2010 – (RealEstateRama) — An updated version of The Economic Benefits of Housing report released today by the California Homebuilding Foundation (CHF) in conjunction with the Center for Strategic Economic Research (CSER), confirms that the housing industry’s economic output has fallen approximately 80 percent since 2005, representing a loss of tens of billions of dollars and hundreds of thousands of jobs to the state’s economy.
The report details the role the housing industry plays in the economic health of California and was conducted as the fourth update to a report first commissioned in 2003. CSER analyzed construction and market data from around the state and quantified the impact of California’s construction sector to the state’s economy. The report is a finalized version of a preliminary analysis released in February of this year.
“The report confirms the profound role that a healthy housing industry plays in contributing to a healthy state economy,” said Liz Snow, CBIA’s President and CEO. “Permits pulled for new construction have risen slightly from 2009 levels, and we hope to see continued increases through the remainder of the year and into 2011 in hopes that the economic benefits of new-home construction will contribute to the state’s economic recovery.”
The report found that new housing construction in California contributed $13.8 billion to the state’s economy in 2009 and supported nearly 77,000 jobs, down from the $14.3 billion and nearly 80,000 jobs estimated in the preliminary analysis released earlier this year. This represents just a fraction of the $67.7 billion dollars and 487,000 jobs that the industry had contributed in 2005, with economic output down approximately 80 percent and employment down 84 percent.
The report also found that every dollar spent on new housing construction in California generates another $0.8 in total economic activity and that each job created through residential construction supports an additional 1.2 jobs.
CSER’s Director, Ryan Sharp, emphasized that “the downturn in building activity has also generated a considerable decline in all of the sectors that supply goods and services to the construction industry as well as those that benefit from workers spending their wages.” Other sectors in the state that benefit considerably from new housing construction include Wholesale Trade; Architecture, Engineering, & Related Services; and Real Estate.
The report released today contains actual figures for 2008 and 2009, with estimates for 2010 from the Construction Industry Research Board (CIRB).
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The California Building Industry Association is a statewide trade association representing thousands of homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. More information is available on the Association’s Web site, www.cbia.org.
The Center for Strategic Economic Research (CSER) is an economic research and consulting group specializing in applied research and strategy development in the regional economics and economic development fields. The organization has been engaged in economic research activities for over 30 years, originally as a research institute affiliated with California State University, Sacramento, known as the Real Estate and Land Use Institute (RELUI), and later as the Sacramento Regional Research Institute (SRRI). To learn more about CSER, visit www.strategiceconomicresearch.org.
The California Homebuilding Foundation (CHF) is the research and education information center for California’s building and construction industries. The Foundation serves the homebuilding industry by providing research and scholarships through its endowments, educational and professional development programs, and recognition of homebuilding professionals. For more information, visit the Foundation’s Web site at www.mychf.org
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Media Contact:
Michael Castillo
Communications Manager
(916) 443-7933 ext. 346
mcastillo (at) cbia (dot) org
