The home-building industry and other housing-related industries contributes an estimated $218 billion per year to the California economy, generates 935,000 jobs and accounts for about 10 percent of all economic activity in the state, according to a 2004 report by the Sacramento Regional Research Institute.
The research institute is a joint venture of the Sacramento Area Commerce and Trade Organization and California State University, Sacramento. The report was prepared for the California Building Industry Association.
This second annual report found that the wholesale and retail trade industry has grown larger than the housing industry. Wholesale and retail trade contributes about 2.7 million jobs and about $221 billion in total output to the state. Last year, the study found that the housing industry was the state’s largest industry, and was responsible for $257 billion in output, or 13 percent of the state’s total output.
New housing construction contributes an estimated $59 billion per year to the state’s economy and creates about 526,000 jobs statewide, according to 2003 data, and about $31 billion of the economic output is the direct result of new construction, while other output is related to industries that supply components and services to the construction industry and the retail and consumption sectors that service construction industry employees and supplier industries, the report states.
In addition to new home construction, the study considers ongoing home sales, financing, brokerage, repairs and management, and operation of existing housing units as part of the overall housing industry in the state. While the report cites a demand in the state for about 230,000 new units per year, based on state Department of Finance estimates, the actual annual housing production has been closer to 188,000 units per year.
In 2003, new housing construction directly generated about 239,000 jobs, up from 207,000 in 2002, and indirectly generated about 145,000 jobs at linked businesses.
The most substantial economic and job-creation impacts of new home construction, which includes direct, indirect and induced activity, were in the Riverside-San Bernardino region, the report states, where the industry accounted for an estimated $10.8 billion in output and 109,600 jobs. In Sacramento, the output was $6.7 billion and job creation at 63,600. Los Angeles-Long Beach and San Diego regions also experienced major housing industry output and job creation.
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