Jan-23 Q&A Part II

Construction, Homebuying, & More

Welcome to Part II of our January Q&A, which is miraculously coming to you only one day into February. Be sure to check out Part I of the Q&A (by Zack), which is available to all subscribers. On Friday we’ll send out our monthly post on the BLS jobs report and, as always, our Week in Review column.

Given the long-term trend of declining male labor force participation and the lack of gender diversity in construction, do you see the participation of women as a key long-term solution to the worker shortage issue?

Yes, it would definitely help. Women currently account for 14.1% of the construction industry workforce, which is the highest level ever. The share of women in the construction workforce has increased pretty steadily over time, from 6.7% in January 1964 (as far back as we have data) to 12.5% at the turn of the century. Admittedly, it has been gradual.

The ongoing emergence of pre-fabrication and adoption of various technologies could render construction more attractive for women going forward. But it should be noted that there is a lot of competition for women in the workforce. They tend to be more educated than their male counterparts and enjoy increasing opportunity in financial services, healthcare, IT, education, logistics, and many other segments.

Meanwhile, men are increasingly struggling in the modern economy. Certain occupations like teaching (73.3% female), nursing (87.9% female), and dental hygienists (96.3%) are female-dominated, and each offers clear career paths/certifications, stable employment, and benefits.

If you’re interested in the share of women in each occupation, you can see the full BLS table here.

How do the residential and commercial markets relate to one another?

It is often said that residential construction precedes commercial construction. The notion is a simple one: when residential subdivisions are built, new opportunities are created for restaurants, retailers, dry cleaners, etc. But in many communities, the pattern has been reversed. Rarely have I observed so many mega-projects in the works, whether in the form of chip manufacturing facilities, alternative energy, or infrastructure. Some of these projects are so large (e.g., chip manufacturing in Columbus, Syracuse, etc.) that they will create demand for residential units. So there’s a relationship, but it’s not unidirectional.

What are your thoughts on when the US might see 30-year fixed mortgage rates back in the 4% range?