Canada's Housing Boom Leads To Hiring Boom
by Jim Adair
The last few years have been a great time to be in the housing industry in Canada. Sales of new and existing homes are setting all-time records. The construction industry is having trouble finding skilled labour. For homeowners wanting to hire a contractor to do renovation work, forget about getting three quotes -- just try getting a quality contractor to call you back! And despite tougher licensing requirements for real estate agents in many parts of the country, the number of new agents continues to grow. A report from Scotiabank Group says the housing boom has been an important factor behind the consistent strength of job creation in recent years. It says total paid employment during the first eight months of 2004 was 5.5 per cent higher than the same period in 2001, which translates into more than 700,000 new jobs. "Perhaps not surprisingly, the construction sector has been a major source of these new jobs. Employment (excluding self-employment) in the broad construction industry has risen 16 per cent, or by 91,000 net new positions, since 2001," says the report. "While this industry represents just five per cent of all paid employment in Canada, it has accounted for 13 per cent of all new jobs." The Greater Toronto Home Builders' Association says that the construction of a single home creates the equivalent of 3.3 jobs for a full year. "Because five out of six jobs created in residential construction take place away from the building site, we consider the residential construction sector to be an invisible giant when it comes to job creation," says the association. The Scotiabank report says that "within the construction sector, residential building construction (including renovations) and specialty trade contractors such as bricklayers, painters and electricians witnessed an increase in payrolls of 28 per cent and 18 per cent, respectively. Engineering construction, which includes land subdivision as well as infrastructure requirements, saw a 12 per cent increase." On the resale side, the report says that real estate transactions require a range of support services, including mortgage brokers and lenders, real estate agents and lawyers. "Combined, these three service industries have increased their payrolls seven per cent over the past three years, adding 34,400 workers," says the report. The rising Canadian dollar has hurt the country's manufacturing sector, with overall employment dropping by 2.4 per cent. However, the report says housing is helping manufacturers of household appliances and furniture -- both industries have expanded their payrolls and created several thousand new jobs. The impact of housing on the overall economy is well documented. Recently in the U.S., the National Association of Realtors® produced a study that says housing wealth has sustained the U.S. economy since the beginning of the decade. "Aggressive cuts in short-term interest rates at the beginning of the decade forestalled economic problems and led to record home sales and home equity borrowing," says David Lereah, NAR's chief economist, in a news release. "Without the stimulus, housing contribution to consumer spending would have been about half as great, the recession much worse and the recovery less robust." Back in Canada, Scotiabank says the strength of the housing market has also led to a rise in self-employment. "Self-employed workers represent about one-quarter of all workers in the construction industry," it says. "From 2001 to 2004, the total number of self-employed workers in Canada increased six per cent, or by 146,600. The number of self-employed construction workers, however, surged 18 per cent over this period, or by 49,000 -- just over one-third of the total rise in the number of self-employed." The report says that in 2005, "while the pace of homebuilding is expected to gradually moderate, the record-setting level of existing home sales this year points to continued strength in renovation activity." It says public sector infrastructure investments are also likely to remain strong. This week Statistics Canada released its annual Survey of Household Spending for 2003. It found that spending for services such as real estate commissions, legal fees, appraisals and surveying was up an average of 16 per cent over previous year. Mortgage insurance expenditures were up 19 per cent. Statistics Canada says personal taxes take up the largest share of the average household expenditures, at 20.2 per cent, followed by shelter costs at 18.9 per cent. | 
