Construction Industry Recovering in Idaho

Projected Industry GrowthProjections by the Idaho Department of Labor indicate construction employment will grow 44 percent from 2012 to 2022, the fourth largest projected growth of any industry in Idaho and 28 percentage points above the projected growth for all industries. During that time, construction is expected to add 3,000 jobs and employ 10,000 people by 2022.

Through the early 2000s, construction was booming throughout the United States. As real estate became the golden investment with an A+ rating and home mortgages available at an all-time high, construction crews could not build houses fast enough. With some hard work and a little bit of luck, a young person straight out of high school could quickly make the kind of money typically associated with a four-year degree. As a result, laborers flooded to the market.

From 2000 to 2007, Idaho employment in the industry exploded, jumping 65 percent to dramatically outpace Idaho’s total employment growth of 19 percent. As banks continued to hand out mortgages to people who could not afford them, the housing market became saturated with available homes and the housing boom quickly turned into a bubble that popped as the first foreclosures hit the market toward the end of 2007, sending the economy into the deepest and longest recession the nation had seen since the Great Depression.

When real estate soured and the housing market dried up, construction jobs dried up with it.

State Impact

Idaho suffered devastating losses in construction as a result. Jobs tied to the construction of buildings – North American Industry Classification System code 236 – were nearly cut in half during the recession.

Construction Job County

From 2007 to 2013, Idaho lost 5,600 construction jobs, a 42.7 percent decline and more than all the construction jobs gained during the seven-year boom before the recession began. As Idaho’s economy began to level out at the end of 2009 and into 2010, construction continued to experience losses throughout the state. The industry did not experience a net gain in jobs until 2013, three years after the recession ended.

Idaho Jobs

Construction as Percent of total

With the continued demise of the construction industry, there was a significant shift in Idaho’s entire industry makeup. At the start of the recession, construction accounted for roughly 2.4 percent of total private sector jobs. By 2013, that was down to 1.4 percent.

National Comparison

Idaho’s projected construction growth outpaces the national projections. Economic Modeling Specialists International projects construction in the U.S. will grow 26 percent from 2012 to 2022 — barely half the projected growth in Idaho.

The economy has a long way to go in order to make up the lost ground caused by the recession. Even if the economy reached the projected growth today, Idaho would still be over 3,000 jobs shy of 2007 construction employment numbers. However, as the economy strengthens, both in the U.S. and in Idaho, construction will continue to rebound. As more businesses look to expand, the unemployment rate continues to drop and consumer confidence increases, demand for construction services will continue to grow.

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