Where are all the construction jobs?

The concept of US housing shortage (discussed here) is difficult to fathom, but people who are on the transaction side of the housing business are beginning to take notice.

Bloomberg: - Wells Fargo Chief Executive Officer John Stumpf said there aren’t enough homes for sale in some markets and that a rebound in sales, prices and construction will bolster future earnings.

“If anything today there’s probably a shortage of housing on the market,” Stumpf, 59, said on a conference call today. “It’s not true in every market and in every price range but when I’m out talking with Realtors and customers, the amount of supply, especially in the lower end or starter houses, there’s not a lot of supply out there.”

The various demographics-based data such as homes for sale as a fraction of working age population (below) clearly supports this assessment.

Source: The ISI Group

This demand is starting to have an effect on US housing starts, which are still at relatively depressed levels but are showing signs of life.

Given the improvements in housing starts, where are all the new construction jobs?

Ignoring the various seasonal adjustments (which are fairly unreliable in this sector), the raw data shows construction job openings above 2009 levels but by no means on a major growth trajectory.

Similarly, the 2013 trend in the overall residential construction jobs in the US is not materially different from other post-crisis years. The chart below includes 2006 to put hings in perspective.

Source: US Department of Labor (NSA)

It seems that some construction firms have been operating with enough slack to absorb new construction orders without a great deal of additional hiring. As the peak construction season approaches however, it remains to be seen if this post-crisis pattern of weak hiring changes substantially.

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