There have been a number of recent citations of our estimate of 47,000 lost jobs because of the construction collapse in the Valley from our August 2009 Fish or Foreclosure report. In that report, I note that the estimate was in fact very conservative because we were using the decline from 2006 levels of construction, rather than the peak years of 2004 and 2005.
Homebuilding in 2006 had already declined by 25% from its peak, but we used this level because it reflected a sustainable long-run level of home building based on our estimates of future population growth in the Valley (which are lower than the state and others). If we looked at the decline from peak, 2005, we would have estimated over 60,000 lost jobs. In hindsight, maybe we should have gone with the higher scenario since that is how people are interpreting it.
A recent report released by the Center for Strategic Economic Research, argues that the 2005 peak was sustainable and points to the over 200,000 housing units a year that the CA Dept of Housing and Community Development estimates as the state's need. They find that in 2009, the construction collapse cost 407,000 jobs statewide. This is a reasonable estimate from a credible source, and it demonstrates that our 47,000 lost job estimate for the San Joaquin Valley was indeed very conservative.
We recently revised our water jobs loss estimate up from 6,000 to 8,500. If we were also to revise our construction job estimate, we would probably revise that number higher too. I still believe construction related job losses exceed farm water related job losses in the Valley by a ratio of nearly 8 to 1.