The construction industry suffered disproportionate job losses during the course of the Great Recession as property values plummeted and the over-heated housing market contracted. An oversupply of housing in many parts of the country caused construction to shrink for several quarters even after other industries had begun to grow again. During the post-recession growth period, however, Idaho’s construction industry has outperformed the rest of the country, fueled by the state’s high rate of population growth and the associated demand for housing and commercial space.
Beginning in late 2007, construction in Idaho began to shed jobs at an alarming rate. The industry contracted by almost 24,000 jobs between October 2007 and March 2009 – about 42 percent of the industry’s total pre-recession employment. While construction suffered across the country, Idaho’s sufferings were particularly acute; the state’s 42 percent industry contraction dwarfed the 29 percent loss experienced nationwide.
In recent years, however, Idaho has experienced consistently high population growth, which has fueled a resurgence in housing demand. Between 2010 and 2016, Idaho’s population grew by 112,000, or 7.4 percent, making it the ninth fastest-growing state. This population growth has underpinned much of Idaho’s job growth – which has consistently run well above average – and fueled a resurgence in Idaho’s real estate markets. In early 2017, Idaho’s statewide house price index re-attained its pre-recession levels.
With healthy real estate markets comes strong demand for new construction. Idaho’s construction industry has re-boomed following the extended contraction of 2007–2012. Since mid-2012, the state has consistently added in excess of 1,000 jobs on a year-over-year basis. In total, the state has added around 14,000 construction jobs above the low point in 2012.
In percentage terms, Idaho has consistently outperformed the national construction industry. Since the beginning of 2013, Idaho has averaged 7.3 percent year-over-year construction employment growth compared with 4.4 percent nationally. This can be at least partially attributed to not only the growth of the state’s population, but also the growth in the number of households. As millennials enter their working lives, they seek independent housing. Between 2010 and 2015, the number of households in Idaho grew by more than 30,000, driving a roughly equivalent buildup of new housing units on top of the rapid buildup of new commercial and industrial space.
This is good news not only for Idaho homebuyers and those working in construction, but also the thousands of Idaho workers employed in related and supporting industries. Construction is an industry with both an enormous and a remarkably localized supply chain. In 2016, the construction industry maintained a $1.17 billion supply chain of input goods and services of which more than half – around $588 million – was purchased within Idaho.
Idaho’s growth has been impressive even when compared to other western states. Recent demographic trends have seen the western United States grow much faster than the other national regions. In the sample of the nine western continental states (shown on the map), eight had population growth faster than the national average, and six ranked in the top12 for population growth. This growth has, predictably, led to stronger construction activity in the western United States.
Even when compared to high-performing regional neighbors, however, Idaho’s construction growth has been exceptional. Construction in Idaho has added 59 percent to its employment over the ‘bottom’ of the recession, second among the western states only to Montana.
Going forward, the Idaho Department of Labor anticipates that construction will continue to clock strong growth. Department projections expect construction employment to grow at 2.5 percent annually through 2024, faster than the total statewide employment forecast of1.8 percent and more than twice as fast as the projected national rate of construction growth of 1.2 percent).
Sam.Wolkenhauer@labor.idaho.gov, regional economist
Idaho Department of Labor
(208) 457-8789 ext 4451