California Spent $25.4B On New Residential Construction Last Year

In the aftermath of the COVID-19 pandemic, America’s housing boom has surged to new heights thanks to a combination of factors that homebuyers haven’t experienced since before the housing bubble more than a dozen years ago.

To begin with, fall of 2020 saw the nation’s housing supply hit one of its lowest levels on record since 1963. The severe lack of housing combined with increased demand pushed new home construction to highs not seen in the past 15 years.

On top of that, supply chain disruptions caused by COVID-19 lockdowns caused lumber prices to soar more than 500% in a single year and helped push total residential construction spending to its own record high of more than $760 billion (seasonally adjusted annual rate).

Despite record-setting residential construction nationally, just seven states account for more than half the value of all building permits approved in 2020. Texas led the way with about $43 billion in building permit value last year, followed by Florida ($37 billion), California ($25 billion), North Carolina ($16 billion), and Arizona ($14 billion). Georgia and Colorado were the only other states to clear the $10 billion threshold.

That both Texas and Florida outspent California—despite having smaller populations than the Golden State—underscores the fact that housing growth is shifting to lower-cost destinations in the South.

The flood of money into new housing has been a boon for construction companies across the country, but a combination of spending and labor force differences means there has been far more construction activity per worker in certain parts of the country. Several Southeastern and Mountain states reported roughly two times as much new residential spending per construction worker compared to the national average of $51,738 in 2020.

New residential spending in South Carolina and Arizona topped $100,000 per worker, while Tennessee, North Carolina, Idaho, and Florida came in around $90,000. Meanwhile, spending was lowest per worker in and around the Mid-Atlantic Region, where West Virginia claimed just $14,367 and Rhode Island, New York, Connecticut, and Pennsylvania each reported less than $24,000 per construction worker.

 

To rank states on their annual new residential construction spending per construction worker, researchers at Construction Coverage divided the value of building permits authorized in 2020, taken from the U.S. Census Bureau’s Building Permits Survey, by the number of construction workers employed there, according to the Bureau of Labor Statistics. Researchers also included statistics on construction employment and wages in each location.

The analysis found that in 2020, California spent approximately $25.4B on new residential construction, which amounted to $37,816 per construction worker—compared to the $51,738 the U.S. spent on new residential construction per construction worker at the national level. Here is a summary of the data for California:

  • New residential construction spending per construction worker: $37,816
  • New residential construction spending: $25,423,120,000
  • Total construction workers: 672,280
  • Relative concentration of construction workers: -4%
  • Median annual wage for construction workers: $58,580

For reference, here are the statistics for the entire United States:

  • New residential construction spending per construction worker: $51,738
  • New residential construction spending: $307,209,904,000
  • Total construction workers: 5,937,830
  • Relative concentration of construction workers: N/A
  • Median annual wage for construction workers: $48,610

For more information, a detailed methodology, and complete results, you can find the original report on Construction Coverage’s website: https://constructioncoverage.com/research/cities-spending-most-on-construction-per-construction-worker-2021

Mike LaFirenza writes for Lattice News Wire


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