Tuesday, June 8, 2010

Housing Bubble Construction Frenzy Maps

The map above is based on the Bureau of Economic Research Table CA06, which provides a breakdown of all employee compensation in a county by industry (using the NAICS code).  This table has a phenomenal amount of data for 1998-2008.  As a very first beginning at mining it, I present the above map which shows the fraction of all employee compensation devoted to construction in 2006 (NAICS code 400).  White is zero percent, and red is 20% of total compensation.

As such, the most famously overheated construction markets show up - the Inland Empire in southern California, western Nevada, and Florida.  However, some other less famous areas were even more construction-centric - mountainous areas of Colorado, Wyoming, Idaho, and Montana (which I imagine are second home and retirement oriented in many cases).  Also very hot are the exurbs of Atlanta, Georgia.  It's worth noting that a good deal of the country is at least mildly fevered (pink), with the most significant exception being the high western plains.

It's notable that a lot of those mountain areas with high construction are also high median income (2008 data):


The last year of data available for table CA06 is 2008, and it doesn't look that different from 2006:


Nevada and Florida have slowed down a bit, but mostly the pattern is the same.

Checking with Calculated Risk, the likely reason is that non-residential construction spending didn't peak until 2008, and so total construction spending was not too depressed by 2008 (though the recession nominally began in December 2007).


It will be interesting to revisit this subject as the 2009 and 2010 county level data become available.

2 comments:

Steve Sailer said...

Thanks.

It might be interesting to color the graph in absolute terms rather than relative terms, which causes large, lightly populated counties to stand out.

fiveislandsorchard said...

Stuart:

The dark areas are sufficiently scattered (rather than clustered) that I wonder whether what it might really be showing is the location of unusually large one-off construction events. For instance, I'm familiar with the dark red area of western Wyoming, and they have been having a crazy natural gas boom there for the last several years.