The labor market is not doing well and the unemployment rate is
hovering around 7.8%. In such a scenario, the recovery in the
housing market could, to some extent, calm the jittery economy by
improving job prospects, primarily in the construction
When the housing market crashed it left many jobless, but now
with new construction activities and home prices showing signs of
improvement, optimism prevails.
The housing market is gradually making its way out of its
dormant state, thus raising hopes for a better job market.
According to the data released by the U.S. Bureau of Labor
Statistics, the construction industry created 30,000 jobs in Dec
2012, including 13,000 related to construction of buildings, and
12,000 for residential specialty trade contractors.
The slump in the housing market did not spare home-improvement
retailers, such as Lowe's Companies Inc. ( LOW ) and The
Home Depot Inc. ( HD ), which faced the
brunt as homeowners refrained from spending on big remodeling
projects. However, a rebound in the housing market would play a key
role to instill confidence in these stocks. Other stocks to benefit
include Fastenal Company ( FAST ), provider of
industrial and construction supplies, and Lumber
Liquidators Holdings, Inc. ( LL ), a retailer of
The sign of confidence is clearly reflected in the current
hiring plans of Lowe's. The company plans to employ 45,000 seasonal
workforce and 9,000 permanent part-time staff in the wake of the
resurging housing market that could trigger demand for remodeling
works. The metric, 'Leading Indicator of Remodeling Activity'
released by Joint Center for Housing Studies of Harvard University,
indicates that the spending on home improvement activities could
surge in 2013.
The data suggests that spending on home improvement-related
projects will witness an increase of 10.6% in the first quarter of
2013, resulting in an annualized value of $127 billion, 16.8% in
the second quarter, reaching an annualized value of $134.4 billion
and 19.7% in the third quarter to reach $145.5 billion.
Consequently, we can expect increased hiring from home-improvement
retailers to better meet the rising demand.
The elevation in home prices and the lowest mortgage rates is
triggering construction activities. If the resurrection in the
construction industry sustains, it will usher in good news for many
job seekers.FASTENAL (FAST): Free Stock Analysis ReportHOME DEPOT (HD): Free Stock Analysis ReportLUMBER LIQUIDAT (LL): Free Stock Analysis
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