by Calculated Risk on 6/17/2008 12:30:00 PM

This graph is an update to the construction employment conundrum: completions have declined about 50% from the peak in 2006, and yet residential construction employment has declined about 500,000 jobs or about 15%.

Click on graph for larger image in new window.

Note that starts are shifted 6 months into the future since it takes a little over 6 months to complete a typical residential unit.

Many observers believe the difference in the percentage declines is because of uncounted illegal immigrants in the construction work force.

The uncounted illegal immigrant argument is important for the impact on the economy, but it doesn't seem to explain why the BLS employment numbers haven't fallen more. Although the BLS is missing the job losses for illegal workers on the way down, they also didn't count them on the way up either.

Here are two other possible explanations for the different percentage declines:

Some construction employees have moved from residential to commercial work, but they are still being reported as residential construction employees to the BLS.

Many workers are still employed, but they are working far fewer hours.

We will know more are CRE construction slumps in the 2nd half of 2008.