The economy is slowing. We can see it in the data: leading indicators like factory new orders, stock prices, credit spreads, and consumer expectations are all weakening.
But the economy is not a monolith. Some sectors can thrive even amid a broader slowdown. Consider what happened in 2015: an ‘industrial recession’, where [sector]Manufacturing[/sector] contracted but the rest of the economy continued to grow.
Could real estate escape this slowdown unscathed? What signals should we be watching?
The best way to monitor the health of specific real estate sectors—like architecture, remodeling, office construction, or single family rentals—is to watch employment data.
Shrinking payrolls is one of the most reliable indicators of weakening economic conditions, and the Bureau of Labor Statistics releases payroll data for even the smallest, most niche sectors. And since employment figures are released monthly (for the prior month), it’s some of the most timely data around.
This data is extremely useful for housing market professionals. For example, a developer planning a mixed-use project needs to know if demand from office tenants is softening. He might track employment in [sector]Commercial and Institutional Building Construction[/sector], [sector]Lessors of Nonresidential Buildings[/sector], [sector]Office Equipment Merchant Wholesalers[/sector], [sector]Printing and Writing Paper, Stationery, and Office Supplies Merchant Wholesalers[/sector], and [sector]Office Furniture (including fixtures) and other Furniture Related Product Manufacturing[/sector].
Until now, monitoring this data has been exceedingly difficulta. Now, our new tool JobsWatch surfaces almost 90 years of fine-grained employment data in a simple interface. The tool is designed to be intuitive, but you can watch a 3 minute video demo here.
The tool is accessible to clients on both our free and paid tiers, but only the full functionality is unlocked for paying subscribers (clients on the free tier can’t see data after 2015).
If you are not currently a paid subscriber, we hope JobsWatch—along with our growing suite of tools (like DynamicTables)—compels you to upgrade your subscription today.
Use the tool here, and see the insights we derived from the most recent data below.
JobsWatch Tool
Some Quick Insights based on JobsWatch
The essence of this tool is that users can plot their own journey—what’s relevant to a real estate agent may not be for an investor. Here is one quick investigation we conducted in under 5 minutes to figure out what’s driving the recent downturn in [sector]Construction[/sector] employment.
For months, we’ve been wondering when [sector]Construction[/sector] employment would turn down. After all, [sector]Manufacturing[/sector] has been shedding workers since 2023. But in the latest data, we are now finally seeing [sector]Construction[/sector] payrolls contracting.
[sector]Construction[/sector] finally capitulated:
JobsWatch can help us understanding which specific sectors are driving this.
Breaking down [sector]Construction[/sector] into its component sectors, we can see that the biggest contributor to the downturn has been the steep deceleration in hiring of [sector]Specialty Trade Contractors[/sector], which has now turned into an outright contraction. If that’s not immediately apparent, just look at how many jobs were being added there (the yellow bars in the chart below) as recently as late 2024—and what it looks like now.
This chart, and those that follow, were generated by clicking ‘Download’ > ‘Download PNG’ in JobsWatch.
3 month change in employment for components of the [sector]Construction[/sector] sector:
Why we often use stacked bars with JobsWatch (Click to expand)
Our tool allows users to view charts either as stacked bars or as line charts.
Line charts are more conventional, but we use stacked bars when we want to see not just which sectors are contracting, but also where that contraction has the greatest impact on the parent sector.
This depends on both the changes occurring within a sector and the overall size of that sector. For example, a steep downturn in a small sector may have little impact on the parent sector, while a modest decline in a large sector can matter much more.
Here is where JobWatch shines. Delving even deeper into the [sector]Specialty Trade Contractors[/sector], we can see that almost no subsector has been spared. But [sector]Residential Speciality Trade Contractors[/sector] and [sector]Foundation, Structure, and building exterior contractors[/sector] have been especially hard it. The latter is especially notable because it’s losing thousands of jobs even though it’s a relatively small sector to begin withb.
Breaking down employment in [sector]Specialty Trade Contractors[/sector]:
To summarize what JobsWatch was able to tell us:
- [sector]Construction[/sector] held up very well compared to other sectors until recently—but it is now contracting.
- While a lot of the focus has been in [sector]Residential Building Construction[/sector] and [sector]Nonresidential Building Construction[/sector], it’s really been [sector]Specialty Trade Contractors[/sector] that has led the downturn
- Specifically, it is [sector]Residential Specialty Trade Contractors[/sector] and [sector]Foundation, Structure, and Building Exterior Contractors[/sector] that are contributing the most to this downturn in [sector]Construction[/sector] employment.
- FRED, an otherwise excellent charting tool run by the Federal Reserve Bank of St. Louis, doesn’t track the most granular sectors, and for anything other than broad sectors only provides annual data. The Bureau of Labor Statistics (BLS) table B-1a only provides the last few months of data. The BLS database is unwieldy.[↩]
- Toggling from absolute to percentage makes this even more clear (we show the chart below in absolute terms).[↩]