Home Construction Slows to 27-Year Low

Russ Steele

In a study done by Chico State Professor for the Nevada County Contractors Association in 2006, Construction contributed 17 percent to the local economy. The home construction industry has been severely curtailed in Nevada County and according to a recent report by the Commerce Department this week that new homes and apartments construction in 2007 was down 24.8 percent from 2006. I saw on KCRA last night that Nevada County's housing market was down only 15 percent while some of the valley counties it as down about 26 percent.  A declining market means fewer home starts.

Money News writes: For December, construction fell by a bigger-than-expected 14.2 percent. The drop in construction in December was bigger than economists had been expecting and reflected weakness in all parts of the country. Housing construction fell by 30.8 percent in the Midwest and was down 25.8 percent in the Northeast and 19.6 percent in the West. The decline in the South was a smaller 3.3 percent.

Many economists believe the housing sector will remain weak through 2008 before starting a rebound in 2009.

The important thing to remember as Nevada County crafts an economic recovery strategy, it that the Construction industry made up 17% of our local economy. That is a big chunk and it will take a while to recover, with not much chance it will get better real soon. When one of the SDA projects are approve over the next five years, it is unlikely that the construction will be done by local contractors, but by large out of town firm, just like the hospital expansion was and the Sierra College Expansion is now.