Building creates jobs
Economic impact continues after buyer moves in
By Bob Finnigan - GTHBA-UDI President
While it wasn’t as scintillating as Hockey Day in Canada, The Home Series running on CBC News this past week was followed closely by industry insiders and, no doubt, many of you.
The first segment dealt with the economic impact of the building industry on Canada’s economy. While the main point of the story was that the impact is HUGE, the reporter couldn’t quite put his finger on what he called “the big number” that could encapsulate the total economic impact of residential construction in Canada.
We did our own digging (actually we penetrated some firewalls and pored over lengthy reports and complex spreadsheets) and we have “the big number” and lots of other housing economic impact statistics to share.
According to data compiled by the Canadian Home Builders’ Association and housing economist Will Dunning, the total value of residential construction investment (primarily new home building and home renovation), based on current levels of activity, comes in at a whopping $84 billion dollars.
The jobs number is a little easier to grasp. Any time a new home is built, two full-time jobs are created for one year. In reality, a house is constructed by hundreds of individuals from various skilled trades working in symphony with the builder as the conductor; but when you put it all together and add in renovation (and we all know how massive that has become), you get 854,000 jobs.
How much do all those workers make? A cool $38 billion is paid to workers involved in residential construction and renovation. It is well-known that construction jobs are high paying. Research reveals that average weekly wages in construction are 106% of the average wages of all other industries.
Last, the big number for taxes paid (this one hurts a bit) based on that $84 billion in economic activity amounts to no less than $22 billion. This includes almost $8 billion in income taxes paid and approximately $6 billion in GST.
All together, residential construction accounts for about 6% of national GDP. Clearly, the CBC reporter was on to something; however, it doesn’t end there.
The rubber really hits the road when new homeowners actually take possession. The typical new homeowner spends approximately $10,000 in his or her first year of occupancy buying all the home-related products that go with the joys of home ownership, everything from love seats to lawn mowers.
Local businesses, be they hardware stores, restaurants, dry cleaners, electronics stores, video rentals, gardening centres, pubs – you name it – certainly notice the sharp uptick in business when the new homeowners start occupying developments in their areas.
GTHBA-UDI builders are very proud of these big numbers and the contributions we make to the economy and quality of life. However, the part of our work that gives us the greatest satisfaction is turning over the keys to brand new homes to excited young couples, knowing that families will soon begin, and communities will soon grow and thrive.
That’s worth at least $84 billion.
Do you have a question about the homebuilding industry? Email Bob Finnigan, president of the Greater Toronto Home Builders’ Association-Urban Development Institute at president@gthba.ca or fax 416-391-2118. The views expressed here are those of the GTHBA-UDI president.
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