Idaho Adding More-Than-Expected Construction Jobs

The last 10 years were quite a ride for the nation’s construction industry. Employment grew 13 percent nationally between 2003 and 2007 – Idaho experienced 41 percent growth. There is no doubt that Idaho’s tremendous population growth fueled the increased demand for housing.

Idaho’s population grew 10.4 percent between 2003 and 2007 while the nation only grew 3.8 percent. When ratios of construction employment to population are compared for each year, Idaho had – and still has – a higher concentration of construction jobs than the nation.

Will chart 1 test

At the height of the housing bubble, Idaho’s nearly 52,000 construction jobs was the equivalent of 3.5 percent of the total resident population. Nationally it was 2.6 percent.

The overabundance of construction employment was evident in a shift-share analysis explaining industry growth trends. Shift-share divides industry employment gains or losses into three categories. The national share identifies the jobs created or lost due to national employment trends for all industries. The industry mix identifies the jobs created or lost due to national employment trends for the specific industry. The remaining shift portion identifies the jobs gained or lost for reasons other than national industry or general trends. This shift, or unexplained growth and loss, in Idaho’s construction employment shows how unique Idaho was compared to the nation.

Idaho superseded national trends every year between 2001 and 2013. The heaviest construction job losses came in 2008 with the loss of 7,100 Idaho jobs and 2009 when 10,600 more jobs were shed. In 2008, over 55 percent of Idaho’s construction losses were unexplained by national trends. In contrast, 6,900 jobs were generated in Idaho’s construction industry in 2006 – over 68 percent of them were unexplained by national trends.

Will chart 2

Construction job losses ended in 2011. During 2012 and 2013 a total of 3,300 jobs were added – a 10 percent increase in the two years following 2011.

This excessive unexplained growth and loss is an interesting phenomenon. Higher-than-average population growth was likely a contributing factor to Idaho’s super housing bubble. With time the industry should adapt to demand changes and meet them more accurately. But 2013 still showed 1,177 of the total 2,200 jobs added as unexplained by national trends, suggesting Idaho’s construction industry should approach 2014 and beyond by cautiously adding additional jobs.

Will.Jenson@labor.idaho.gov, regional economist
(208) 557-2500, ext. 3077