Ersys Logo Ersys Name
Sacramento County – Building Permits 2023

Construction Word Cloud

Building permits serve as a critical indicator of economic health, reflecting trends in construction, real estate, and broader economic activity. Governments, investors, businesses, and policymakers closely monitor building permit statistics because they provide valuable insights into future economic growth, employment, investment patterns, and urban development. Understanding the economic impact of tracking these permits is essential for informed decision-making at both macro and microeconomic levels.

  1. Leading Indicator of Economic Growth Building permits are a leading economic indicator, meaning they signal future economic activity before it materializes. When permit approvals rise, it suggests that developers and homeowners are planning new construction projects, which will lead to increased spending on labor, materials, and services. This activity stimulates economic growth by:

    • Boosting GDP: Construction contributes significantly to Gross Domestic Product (GDP). Increased permits indicate upcoming investments in residential, commercial, and infrastructure projects, driving economic expansion.
    • Encouraging Multiplier Effects: Construction generates demand for related industries, including manufacturing (steel, cement, lumber), transportation, and professional services (architecture, engineering). Each dollar spent in construction circulates through the economy, creating additional economic value.


  2. Employment and Labor Market Effects The construction sector is a major employer, and building permit trends directly influence job creation. Monitoring permits helps predict labor demand in:

    • Direct Construction Jobs (e.g., carpenters, electricians, plumbers)
    • Indirect Jobs (e.g., suppliers, equipment manufacturers, logistics)
    • Induced Jobs (e.g., retail, food services, real estate agents)


    A decline in permits may signal upcoming layoffs, while an increase suggests hiring surges. Policymakers use this data to implement workforce training programs or adjust fiscal policies to support employment stability.

  3. Real Estate Market Stability Building permits provide insights into housing supply and affordability. Key impacts include:

    • Housing Supply & Prices: A surge in residential permits can alleviate housing shortages, stabilizing or reducing home prices. Conversely, a permit slowdown may indicate future price increases due to constrained supply.
    • Commercial & Industrial Development: Permit trends for offices, warehouses, and retail spaces reflect business confidence. Rising commercial permits suggest economic optimism, while declines may signal downturns.


  4. Government Revenue and Public Planning Local governments rely on building permits for:

    • Tax Revenue: Permit fees, property taxes, and sales taxes from construction activities fund public services (schools, roads, utilities).
    • Infrastructure Planning: Permit data helps municipalities plan for transportation, utilities, and zoning adjustments to accommodate growth.
    • Regulatory Adjustments: Monitoring permits allows governments to identify bottlenecks (e.g., excessive delays in approvals) that may hinder economic development.


  5. Investment and Financial Market Implications Investors and financial institutions analyze permit data to:

    • Guide Real Estate Investments: Developers and REITs (Real Estate Investment Trusts) use permit trends to identify high-growth regions.
    • Assess Credit Risk: Banks evaluate loan applications based on construction demand; rising permits may indicate lower risk in mortgage and commercial lending.
    • Predict Commodity Demand: Building material suppliers and futures traders monitor permits to anticipate demand for lumber, steel, and other inputs.


  6. Economic Policy and Risk Management Policymakers use permit statistics to:

    • Adjust Monetary Policy: Central banks may consider construction trends when setting interest rates to control inflation or stimulate growth.
    • Mitigate Bubbles & Crashes: Rapid increases in permits may signal overheating (e.g., housing bubbles), while prolonged declines could foreshadow recessions.


Conclusion

Monitoring building permit statistics is vital for anticipating economic trends, guiding investments, and shaping policy. These permits influence GDP growth, employment, real estate dynamics, government revenue, and financial markets. By analyzing permit data, stakeholders can make proactive decisions that enhance economic stability, promote sustainable development, and mitigate risks. Ignoring these indicators could lead to misallocated resources, housing crises, or missed growth opportunities-underscoring the importance of vigilant tracking in economic planning.

 
Quarter
      Total Units
      Single-Family Units
      All Multi-Family Units
2-unit
3 / 4-unit
5+ unit
     
1997 Q1 384  bar 228  bar 156  bar 00156
Q2 308  bar 308  bar 0  bar 000
Q3 315  bar 315  bar 0  bar 000
Q4 492  bar 492  bar 0  bar 000
 
1998 Q1 460  bar 244  bar 216  bar 00216
Q2 521  bar 521  bar 0  bar 000
Q3 622  bar 614  bar 8  bar 800
Q4 860  bar 590  bar 270  bar 00270
 
1999 Q1 525  bar 377  bar 148  bar 00148
Q2 746  bar 550  bar 196  bar 00196
Q3 686  bar 686  bar 0  bar 000
Q4 944  bar 498  bar 446  bar 00446
 
2000 Q1 685  bar 393  bar 292  bar 016276
Q2 522  bar 336  bar 186  bar 20184
Q3 655  bar 539  bar 116  bar 00116
Q4 630  bar 623  bar 7  bar 070
 
2001 Q1 571  bar 571  bar 0  bar 000
Q2 1,003  bar 811  bar 192  bar 20190
Q3 662  bar 660  bar 2  bar 200
Q4 1,321  bar 683  bar 638  bar 100628
 
2002 Q1 660  bar 474  bar 186  bar 60180
Q2 883  bar 873  bar 10  bar 1000
Q3 1,013  bar 754  bar 259  bar 20257
Q4 1,304  bar 988  bar 316  bar 00316
 
2003 Q1 1,007  bar 993  bar 14  bar 608
Q2 814  bar 640  bar 174  bar 80166
Q3 1,074  bar 751  bar 323  bar 40319
Q4 1,379  bar 932  bar 447  bar 00447
 
2004 Q1 918  bar 704  bar 214  bar 40210
Q2 927  bar 927  bar 0  bar 000
Q3 1,083  bar 772  bar 311  bar 264281
Q4 1,129  bar 743  bar 386  bar 480338
 
2005 Q1 830  bar 692  bar 138  bar 20136
Q2 1,020  bar 921  bar 99  bar 81873
Q3 899  bar 644  bar 255  bar 140241
Q4 617  bar 487  bar 130  bar 43690
 
2006 Q1 399  bar 348  bar 51  bar 01536
Q2 478  bar 418  bar 60  bar 61836
Q3 503  bar 280  bar 223  bar 1427182
Q4 255  bar 245  bar 10  bar 208
 
2007 Q1 511  bar 379  bar 132  bar 46122
Q2 429  bar 397  bar 32  bar 10418
Q3 273  bar 271  bar 2  bar 200
Q4 203  bar 198  bar 5  bar 005
 
2008 Q1 125  bar 121  bar 4  bar 040
Q2 542  bar 230  bar 312  bar 06306
Q3 160  bar 150  bar 10  bar 208
Q4 135  bar 119  bar 16  bar 0016
 
2009 Q1 46  bar 37  bar 9  bar 090
Q2 97  bar 85  bar 12  bar 0120
Q3 120  bar 120  bar 0  bar 000
Q4 77  bar 71  bar 6  bar 006
 
2010 Q1 166  bar 51  bar 115  bar 00115
Q2 90  bar 73  bar 17  bar 0314
Q3 96  bar 90  bar 6  bar 060
Q4 64  bar 64  bar 0  bar 000
 
2011 Q1 72  bar 72  bar 0  bar 000
Q2 40  bar 40  bar 0  bar 000
Q3 67  bar 67  bar 0  bar 000
Q4 36  bar 36  bar 0  bar 000
 
2012 Q1 72  bar 72  bar 0  bar 000
Q2 85  bar 85  bar 0  bar 000
Q3 160  bar 158  bar 2  bar 200
Q4 139  bar 139  bar 0  bar 000
 
2013 Q1 176  bar 167  bar 9  bar 630
Q2 258  bar 152  bar 106  bar 00106
Q3 197  bar 197  bar 0  bar 000
Q4 147  bar 145  bar 2  bar 200
 
2014 Q1 118  bar 116  bar 2  bar 200
Q2 170  bar 170  bar 0  bar 000
Q3 156  bar 156  bar 0  bar 000
Q4 103  bar 103  bar 0  bar 000
 
2015 Q1 320  bar 90  bar 230  bar 20228
Q2 202  bar 194  bar 8  bar 800
Q3 465  bar 221  bar 244  bar 220222
Q4 320  bar 209  bar 111  bar 40071
 
2016 Q1 256  bar 138  bar 118  bar 00118
Q2 282  bar 274  bar 8  bar 206
Q3 309  bar 163  bar 146  bar 20144
Q4 280  bar 262  bar 18  bar 1800
 
2017 Q1 483  bar 223  bar 260  bar 120248
Q2 329  bar 216  bar 113  bar 00113
Q3 253  bar 231  bar 22  bar 6016
Q4 745  bar 390  bar 355  bar 00355
 
2018 Q1 490  bar 275  bar 215  bar 00215
Q2 272  bar 272  bar 0  bar 000
Q3 440  bar 342  bar 98  bar 8090
Q4 366  bar 290  bar 76  bar 4864
 
2019 Q1 391  bar 230  bar 161  bar 223136
Q2 549  bar 365  bar 184  bar 40180
Q3 601  bar 275  bar 326  bar 340292
Q4 1,024  bar 416  bar 608  bar 204584
 
2020 Q1 464  bar 283  bar 181  bar 68167
Q2 129  bar 118  bar 11  bar 209
Q3 306  bar 292  bar 14  bar 2012
Q4 405  bar 342  bar 63  bar 0063
 
2021 Q1 301  bar 225  bar 76  bar 4072
Q2 703  bar 379  bar 324  bar 1816290
Q3 266  bar 262  bar 4  bar 040
Q4 357  bar 315  bar 42  bar 4038
 
2022 Q1 389  bar 295  bar 94  bar 61276
Q2 582  bar 387  bar 195  bar 80187
Q3 212  bar 208  bar 4  bar 400
Q4 269  bar 265  bar 4  bar 400
 
2023 Q1 520  bar 209  bar 311  bar 26303
Q2 455  bar 238  bar 217  bar 20215
Q3 442  bar 293  bar 149  bar 280121
Q4 442  bar 414  bar 28  bar 4024
 


Sources: STI: PopStats and STI: Colossus