How a House Builds the GDP

The U.S.  Census Bureau has a visualization that shows some of what we use to build a house, how much we spent (as a country), and how many jobs were created during 2018 and 2019.

Let’s take a look.

Housing-Related Manufacturing

Housing can jumpstart or retard economic growth. Below you can see the industries that participate. Ranging from asphalt shingles to mattresses, the manufactured goods that populate a house send many millions of dollars to the GDP:

All dollar and employment numbers (below) are from the graphic (above):

Value of Shipments      Employment               Value of Shipments   Employment

Asphalt                                                                        Truss Manufacturing

2018: $11,016,563                  10,136                              2018: $7,161,813                    33,197

2019: $11,170,428                  9,987                                2019: $7,703,694                   30,946

Concrete Block and Brick                                   Radio & TV Broadcasting & Wireless

2018: $4,852,420        15,760                                        2018: $26,841,246                  61,135

2019: $4,686,965        16,298                                        2019: $26,859,934                  58,119

Paint and Coating                                                   Upholstered Household Furniture

2018: $27,352,252                  35,569                             2018: $12,714,344                  69,611

2019: $26,439,617                 34,683                              2019: $11,964,222                  64,511

Residential Electric Lighting Fixtures            Mattress Manufacturing

2018: $2,016,360                    6,296                               2018: $7,061,471                    21,130

2019: $2,169,078                    5,831                                2019: $7,177,489                    19,440

Wood Window & Door Manufacturing          Major Household Appliances

2018: $13,283,582                  54,155                             2018: $19,551,044                  42,395

2019: $13,559,877                  52,436                             2019: $20,516,602                  43,170

Wood Kitchen Cabinets & Countertops   Cut Stock, Resawing Lumber & Planing

2018: $15,245,502                  97,981                             2018: $6,002,482                    21,693

2019: $14,224,367                  89,719                             2019: $5,554,342                     20,394

Air-Conditioning & Warm Air Heating Equipment & Commercial & Industrial Refrigeration Equipment

2018: $33,422,551                  95,074

2019: $34,194,512                   95,354

Cement Manufacturing

2018: $8,531,996                    15,658

2019: $9,018,680                    15,590

Our Bottom Line: The GDP

We could say that housing-related manufacturing is all about the GDP.  While the GDP has four components–Consumption, Gross Investment, Government, Net Exports–housing takes us primarily to two of them. When the house was first built, its selling price would have been included as a part of the Gross Investment component. Yes, Gross Investment mainly reflects business spending. But here, the house is defined as an investment. Next, we need to ask who purchased the goods we listed. If you or I bought an appliance, then it is a Consumption Expenditure. When the contractor is the buyer, then it becomes a part of the price of the house. So, the concrete is added to the house itself. However, like some appliances, the furniture is a consumption expenditure.

The Congressional Research Service looked at our housing spending:

My sources and more: This U.S. Census Bureau site had the visuals and the numbers. Then, if you want to learn more about the GDP, the one source I suggest is GDP; A Brief But Affectionate History. From there, for current stats, do go to the U.S. BEA and to the Atlanta Fed’s GDPNow model (which currently is at six percent growth for the 3rd quarter).