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UNITED STATES DEPARTMENT OF LABOR
Frances Perkins, Secretary
BUREAU OF LABOR STATISTICS
Isador Lubin, Commissioner (on leave)
A. F. Hinrichs, Acting Commissioner
+
Probable Volum e
of
Postwar Construction
Bulletin l^o. 825
For sale by the Superintendent of Documents, U. S. Government Printing Office
Washington 25, D. C. * Price 10 cents
Letter of Transm ittal
U n ited S tates D e partm e n t of L a b o r ,
B u reau of L a b o r S t a tistic s ,
Washington, D. C., M ay 14,1945.
The S ec r e ta r y of L a b o r :
I have the honor to transmit herewith a report on the probable
volume of postwar construction, and on the estimated site employment
in postwar new construction. The report on probable volume was
published in the Monthly Labor Review for February, March, and
April, 1945. Estimated site employment (part 4) of the bulletin is
to be published in a later issue of the Review. These reports were
prepared in the Bureau’s Division of Construction and Public Em
ployment by Alexander C. Findlay. The historical statistical data
were developed by Henry F. Haase.
A. F. H in r ic h s ,
Acting Commissioner.
Hon. F rances P e r k in s ,
Secretary of Labor.
Contents
Part 1.— General forecast and its controlling background:
Summary-----------------------------------Scope and methods of the study____________________________________
Construction volume in the past___________________________________
Rate of expansion-------------------------------------------------------------------------Basic conditions governing postwar construction____________________
Design and physical environment______________________________
Materials and construction methods___________________________
Financing o f construction______________________________________
Urban rehabilitation________________
Basic assumptions of forecast______________________________________
Effective demand for construction__________________________________
Private residential building____________________________________
Industrial and commercial construction________________________
Construction by nonprofit organizations________________________
Public construction__________________________________________
Part 2.— Demand for private construction:
Summary_________________________________________________________
Residential-building situation____________
Housing situation in 1940--------------------------------------------------------Changes since 1940____________________________________________
Probable volume of postwar residential construction:
Private housing--------'--------------------------------------------------------------Public housing________________________________________________
Additions, alterations, and repairs_____________________________
Nonresidential-building situation:
Commercial building_______________________
Industrial construction-------------------------------------Other private building construction____________________________
Public-utility situation_____________________________________________
Railroads_____________________________________________________
Local transit__________________________________________________
Communications______________________________________________
Gas, electric service, and pipelines_____________________________
Part 3.— Demand for public construction:
Summary----------------------------------------Public-construction situation----------------Probable volume of postwar public construction:
Highways, roads, and streets__________________________________
Public housing--------------------School buildings_________________ ______ *---------------------------------Hospitals and institutions-----------Public administration buildings-----------------------------------------------Military and naval construction_______________________________
Airport construction___________________________________________
Reclamation, conservation, and development_________________
Sewer and water facilities______________________________________
Parks and recreational facilities________________________________
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IV
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
Part 4.— Site employment in postwar new construction:
Summary__________________________________________________________
Scope and method of the study____________________________________
Relation of construction employment to construction volume________
Timing of employment_____________________________________________
Man-years of employment under 1940 conditions___________________
Employment by occupation________________________________________
Changes in occupations and in productivity________________________
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B u lle tin 7s[o. 825 o f th e
U n i t e d S ta te s B u r e a u o f L a b o r S ta tistic s
[Reprinted from the M onthly L abor R eview , February, March, and April, 1945, with additional data]
P ro b a b le V o lu m e o f P o stw a r C o n stru ctio n
Part 1.— General Forecast and Its Controlling Background
Sum m ary
THE forecast of postwar construction here presented is necessarily
conjectural, as, although some basic conditions are now rather clearly
apparent, others are less so, and still others have yet to be established.
Either turbulent economic conditions, such as those immediately fol
lowing the First World War, or a period of severe industrial conflict
would produce construction activities quite different from those here
predicted. Neither such development is expected, but neither is
impossible. A period of boom psychology such as that of the later
1920,s would increase the total volume greatly and shift the pattern
markedly toward ambitious commercial projects. It is believed that
this will not occur, but this too is not impossible. Similarly, public
construction has been predicted on the basis of the public policy which
seems likely, according to assumptions which are later stated, Policies
either of drastic retrenchment in public construction or of expansion
for the primary purpose of stimulating employment would obviously
change the volume of this work greatly, with considerable influence on
private work as well.
The average volume of work started annually is expected to be about
10.9 billion dollars per year, at 1940 cost levels, in the 5-year period
following the end of the war, for new construction, additions, moderni
zation and alterations, and major repairs of the type for which building
permits are usually issued. Such work will probably be started to the
extent of about 4% billion dollars during the final phase of the war—
i. e., against Japan only—which is assumed as 1 year. From this fig
ure it is expected to increase to almost 8 billion dollars in the first post
war year, and to about 12 billion dollars in the fifth postwar year. In
addition, maintenance and routine minor repairs are expected to
amount to about 3.7 billion dollars in the last year before defeat of
Japan, and to average about 4.4 billion dollars annually in the following
5-year period.
The largest single element in this volume of work will be nonfarm
residential building, for which the expected average is about 900,000
new dwelling units per year with annual construction cost of 3.4
billion dollars.1 Privately financed units will probably constitute
about 95 percent of these. It is estimated that about 250,000 private
units will be started during the filial year of war against Japan only,
although this number will be governed to a considerable degree by the
time of year at which Germany is defeated. About 550,000 private*
* Like all other construction value figures, except where otherwise noted, this has been converted to the
1940 level of costs. The estimate of an average volume of 900,000 dwelling units per year includes apart
ments, etc., as well as detached houses. This is to be distinguished from estimates of the construction
rates required to meet housing needs within specified periods made by the National Housing Agency and
other organizations.
2
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
units are expected to be started in the first year following defeat
of Japan, and the number started will probably increase to about
1,040,000 in the fifth year.
Private industrial construction including alterations during this
period will probably be almost 700 million dollars per year, which
is somewhat under three-fourths of the previous peak, and com
mercial construction at 1.2 billion dollars per year will be within
about 12 percent of its 1929 peak. This will be quite unlike pre
depression commercial construction, however, with new work over
shadowed by modernization and with few if any of the monumental
commercial buildings for which the previous period of active com
mercial construction is best known. The significant although minor
field of construction for nonprofit and community organizations, such
as churches and voluntary hospitals, will increase substantially, but
probably i*ot to its pre-1929 levels.
Utility construction will probably be almost 1.15 billion dollars with
construction for railroads the largest single group, followed by that for
communications companies and for light and power companies. Other
utility work will be considerably smaller.
New public work, according to the assumptions later stated, will be
somewhat over a third of private work. The principal type of work
will be highways, roads, and streets, with related structures, for which
preparations are well advanced and for which financing will be avail
able irrespective of considerations of resulting employment. States
and local government bodies have a great volume of other work
which they would like to carry out, but actual working plans are
completed or in preparation for a considerably smaller program than
that which has been estimated, and grants or loans will be needed in
many cases to permit this preparation. For the most part financial
preparation is likewise somewhat poor, and there are numerous indi
cations that Federal aid will be commonly expected. It is therefore
of primary importance that a decision on public policy be reached at
the earliest possible date, in order that programs may be adjusted as
necessary and, particularly, that a relatively dormant period while
waiting for favorable Federal legislation may be avoided.
It is assumed that the postwar period proper will be preceded by a
period of war against Japan only. For the purposes of this forecast
this is assumed to be a year, although there are indications that it may
be longer. During this period some degree of reconversion is likely
to occur in building-material establishments, there will probably be
an early and extensive relaxation of restrictions on the use of metals,
and establishments requiring no real physical reconversion will be
able to build up depleted trade inventories if materials and manpower
are available. Maintenance and repair work, using proportionately
little new material, will be the first activity to get under way. New
residential building will expand from its low wartime level, but the
volume of such construction will depend on the time of year at which
Germany is defeated, and may vary between 175,000 and 350,000
dwelling units started. Commercial construction, both new work
and modernization, is likely to be little above its earlier level during
this final stage of the war. There will be industrial alterations for
reconversion purposes, but less than after the defeat of Japan, and
probably little new industrial construction except that useful for war
production.
3
PART 1.— GENERAL FORECAST
Estimated construction volume during this year of Pacific war and
during the 5 years after the defeat of Japan is given in table 1.
T able 1.— Estim ated Value o f Principal T ypes o f Construction To B e Started During
Final W ar Year and First 5 Years Thereafter1
Value (in millions of dollars)
Type of construction and source of funds
Final
war
year *
First 5 post-war years
1st
2nd
3rd
4th
5th
Aver
age
N ew construction
Total new construction; including additions, altera*
tions, modernization, and major repairs *...............
4,460
7,890 10,870 11,805 11,990 12,065
10,924
Private construction—..................—........................... 3.045
Residential (nonfarm)............... ........................... 1,250
New construction............................................ 1,000
Additions, alterations, modernization and
major repairs................................................
250
Nonresidential...................................... ...............
780
275
Commercial................................— ................
New construction.....................................
150
Additions, alterations, modernization,
and major repairs—. .............................
125
Industrial.......... —- .........................................
375
New construction....................................
175
Additions, alterations, modernization,
and major rep a irs................................
200
Religious............. - ..........................................
50
Educational...................................—..............
25
Social and recreational....................................
15
Hospital and institutional..............................
30
Miscellaneous..................................................
10
Farm (residential and nonresidential).................
325
690
Utility «..................................................................
300
Railroad........................... ...............................
15
Local transit......... - ........................................
25
Pipe line..........................................................
Electric light and power.................................
150
G as„_.............................................................
50
Telephone and telegraph................................
150
5,765
2,850
2,300
8,015
3,900
3,100
8,560
4,250
3,400
8,545
4,300
3,500
8,595
4,450
3,700
7,896
3,950
3,200
550
1,530
750
250
800
2,400
1,300
400
850
2,550
1,350
500
800
2,550
1,350
550
750
2,450
1,250
550
750
2,296
1,200
450
500
500
300
900
700
400
850
750
450
800
750
500
700
750
550
750
690
440
200
100
60
50
50
20
425
960
350
25
25
250
60
250
300
150
75
75
75
25
525
1,190
400
40
25
300
75
350
300
175
80
85
85
25
550
1,210
350
45
25
300
90
400
250
175
80
85
85
25
550
1,145
350
45
25
300
75
350
200
175
80
85
85
25
500
1,195
350
45
25
350
75
350.
250
155
75
76
76
24
510
1,140
360
40
25
300
75
340
Public construction........................ ............................. 1,415
Highway, road, and street *—..............................
500
Residential building.............................................
10
Nonresidential building........................................
420
Educational....................................................
100
Hospital and institutional..............................
35
Public administration.....................................
50
225
Commercial and industrial...................... ......
Miscellaneous.................................................
10
M ilitary and naval................................................
200
Civil aviation.........................................................
0
Reclamation, conservation, and development.—.
100
75
Water supply................................ .......................
75
Sewage disposal.............................. ......................
Social and recreational •.............. ....... ..................
15
A ll other Federal................................. .................
5
Miscellaneous non*Federal..................................
15
2,125
900
95
380
250
45
75
0
10
100
60
275
110
125
50
10
20
2,855
1,200
145
580
400
70
100
0
10
75
75
325
140
200
75
15
25
3,245
1,400
175
690
450
80
150
0
10
50
80
350
160
225
75
15
25
3,445
1,500
190
725
450
90
175
0
10
40
80
400
170
225
75
15
25
3,470
1,500
190
750
450
90
200
0
10
40
80
400
170
225
75
15
25
3,028
1,300
159
625
400
75
140
0
10
61
75
350
150
200
70
14
24
Total maintenance and minor repair---------------------- 3,680
5,070
4,725
4,265
4,015
4,015,
4,418
Private construction—................................................ 2,885
Residential buildings............................................ 1,000
Nonresidential buildings.......................................
500
Farm......................................................................
300
U tility.................................................................... 1,085
Railroad..........................................................
800
Local transit....................................................
50
Pipe line..........................................................
15
Electric light and power..... ...........................
85
Gas........................................ .........................
25
Telephone and telegraph................................
110
4,005
1,500
750
400
1,355
1,000
75
20
100
30
130
3,675
1,400
600
350
1,325
1,000
70
20
90
25
120
3,330
1,300
500
350
1,180
900
60
15
85
20
100
3,180
1,300
500
300
1,080
800
60
15
85
20
100
3,180
1,300
500
300
1,080
800
60
15
85
20
100
3,474
1,360
570
340
1,204
900
65
17
89
23
11Q
Maintenance and minor repairs
See footnotes at end of table.
4
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
T able 1.— Estim ated Valve o f Principal T ypes o f Construction T o B e Started During
Final W ar Year and First 5 Years Thereafter1—Continued
Value (in millions of dollars)
Type of construction and source of funds
Public construction........................................ .............
Highway, road, and street....................................
Building (residential and nonresidential)............
Reclamation, conservation, and development.
Water supply........................................................
Sewage disposal.....................................................
Final
war
year8
795
600
50
50
75
20
First 5 post-war years
1st
2nd
1,065
800
75
75
90
25
1,050
800
75
70
85
20
3rd
935
700
70
65
80
20
4th
835
600
70
65
80
20
5th
835
600
70
65
80
20
Aver
age
944
700
72
68
83
21
1 Converted to 1940 cost levels.
8 Between defeat of Germany and defeat of Japan.
* Additions, alterations, modernization and major repairs of the type for which building permits are
usually issued are included with new construction except where listed separately.
4 Includes municipal and other publicly owned utilities except those constructed in conjunction with
reclamation, conservation and development program.
8 Includes culverts, bridges, grade separations, and other related work.
8 Includes buildings and nonbuilding construction.
Scope and M ethods o f the Study
This forecast covers construction of all types within the United
States during the period of war against Japan only, which is assumed
to be a year in duration, and the 5-year period following the end of
the war. It includes additions, alterations, modernization, and
major repairs of the type for which building permits are usually
issued and, as a separate group, routine minor repairs and main
tenance work.
It is essentially an informed opinion based on information from a
wide variety of sources and on analysis of controlling social and
economic conditions. Information on scheduled or contemplated
construction programs has been obtained through personal interviews
and in reports from utilities, professional associations, architects,
trade associations in a number of fields, officials of Federal agencies,
financing organizations, institutional investors, and the architectural,
engineering, building and financial press. Compilations of contem
plated work, budgets and published reports of actual appropriations
for public work issued by Federal, State, and local government units
have been used. Interviews have been had with consultants in the
construction plans of nonprofit and community organizations, and
with promotional builders. Consideration has been given recent
developments in building materials, methods, and in the case of resi
dential work to major recent trends in job organization and manage
ment procedures. The past record of major types of construction by
year from 1920 has been studied, along with the financial record of the
various types of structures which were built. Trends in distribution
and merchandising methods have been given attention, along with
changes in social customs such as those stilldeveloping from widespread
use of automobiles.
PART 1.— GENERAL FORECAST
5
For the most part, postwar construction programs are highly
tentative, including those of certain utilities and other firms long
noted for careful planning of their capital-expenditure programs.
Programs have been prepared by a number of public bodies, but
with few exceptions these are schedules of work regarded as desirable
and are dependent upon appropriation of necessary funds. Thus, a
compilation of contemplated construction work, were it feasible,
would not in itself indicate the volume to be expected.
No attempt has been made to prepare a strictly mathematical fore
cast, with volume computed from conditions which can be expressed
numerically, because neither the techniques that could be used nor
available data are satisfactory.
For convenience in comparison, all values have been converted to
1940 cost levels. The indexes used are not fully satisfactory, especially
for years prior to 1935, and will be revised when there is opportunity
for the special study involved. It is believed, however, that these
revisions will not be great enough to change the significance of com
parisons of given types of construction with the records of past years.
Construction Volum e in the Past
The volume of principal types of new construction, including addi
tions and alterations and those major repairs for which building
permits are usually issued, but not including maintenance and routine
minor repairs, is shown in table 2, by years, from 1920 through 1943.
These figures have been converted to the 1940 level of costs, within
the limitations of the cost indexes used.
Prior to the war there were 5 years— 1925 through 1929— in which
the annual total of expenditure for construction exceeded 10 billion
dollars. The peak for all types of construction came in 1927, but
that for nonfarm residential building was reached in 1925, that for
commercial 4 years later, and those for some of the utility classifica
tions not until 1929 or 1930.
Although the pattern predicted for the postwar period differs sub
stantially from that for the first few years in table 2, certain relation
ships will be the same. Of the large groups of new private construc
tion, residential will rise fastest, just as it did about 25 years earlier.
New commercial work will rise more slowly than residential building
and also more slowly than it did* in the past, but this will be out
weighed by a rapid expansion of commercial modernization and
major alterations, for which owners' plans are well advanced. Public
work will increase rapidly, in contrast to its gradual increase for 11
years to its prewar peak reached in 1931. This important difference
from the development following the previous war will be the result
of two major factors—increased general recognition of the value of
certain kinds of public construction, notably reclamation and con
servation work, and widespread realization of the importance of
construction to total economy.
646206°— 45-----2
6
PROBABLE! VOLUME OF POSTWAR CONSTRUCTION
T able 2.— Estim ated New-Construetion Expenditures in the United
[Millions of dollars]
Typo of construction and
source of funds
1920 1921 1922 1923 1924 1925
1926
1927
1928
1929 1930 1931
New construction *._______ ____ 5,735 6,156 8,511 9,020 9,996 11,037 11,555 11,608 11,154 11,241 9,126 7,466
Private construction................... 4,729 4,780 6,854 7,642 8,385
Residential (nonfarm) *........ 1,578 2,151 3,711 4,099 4,691
NonresidentialJ___________ 1,809 1,662 1,811 1,735 1,694
Commercial___________ 610 696 799 768 787
Industrial........................ 967 603 506 510 422
59
94 147 136 149
Religious............... .........
24
Educational....................
43
86
96 105
Social and recreational.. 116 166 197 157 158
Hospital and institu33
76
73
60
68
tional.
Miscellaneous_______ . .
0
0
0
0
0
Farm *................................... 589 390 458 545 604
U tility *................................. 753 577 874 1,263 1,396
Railroad.......................... 151 170 173 329 335
67
54
84
51
Local transit...................
67
41
29
Pipeline...........................
51
74
60
Electric light and power. 290 169 289 503 546
51 132 114 163
Gas..................................
70
Telephone andtelegraph. 134 104 145 190 227
9,137
5,084
2,182
1,029
487
195
128
248
95
9,626
5,036
2,609
1,218
637
210
127
317
100
9,438
4,679
2,654
1,247
632
211
124
312
128
8,863
4,278
2,603
1,207
682
197
124
274
119
8,983 6,407 4,641
3,786 1,964 1,753
2,987 2,356 1,501
1,361 1,177 759
942 590 247
182 158 124
147 151 141
225 169 156
74
130 111
0
0
0
0
0
0
0
512
526
497
560
552 393 281
1,359 1,484 1,545 1,456 1,658 1,694 1,106
472
433
370
407
483 507 313
49
49
85
72
78
74
83
91
61
62
40
112
35
94
494
425
453
473
434 503 317
144
206
219
186
161 156 106
241
264
257
291
390 410 202
Public construction..................... 1,006 1,376 1,657 1,378 1,611 1,900 1,929 2,170 2,291 2,258 2,719 2,825
704
719
954
Highway, road, and street *. 329 517 576 474 602
836
970 1,237 1,233
0
0
0
0
Residential building.............
0
0
0
0
0
0
0
0
635
662
Nonresidential building....... 277 472 629 526 540
689
682 710 710
650
Educational.................... 193 341 456 392 403
454
421
417
460
410 395 328
Hospital and institu
33
68
88
118
62
70
77
50
80
106 122 147
tional.
Public adm inistration...
65
64
79
94
94
39
45
73
119 158 204
50
Commercial •..................
0
0
0
0
0
0
0
0
0
0
0
0
Industrial •......................
0
0
0
0
0
0
0
0
0
0
0
0
Social and recreational..
52
51
12
16
24
41
56
22
47
35
31
20
Miscellaneous.................
0
0
0
0
0
0
0
0
0
0
0
0
14
M ilitary and naval............... 157
59
13
34
18
10
17
21
10
33
50
Reclamation, conservation,
62
74
86
84
54
68
74
88
71
100 132 180
and development.
163
162
83 120 157 128 175
170
137
Water supply........................
147 240 209
65
155
169
204
214
93 122 102 122
Sewage disposal....................
148 169 152
1
4
12
All other Federal..................
1
1
1
2
15
11
3
2
12
139
226
184
Miscellaneous non-Federal
52
175 187 279
68
54
73
130
40
(public service enter
prises).
1 Converted to 1940 cost levels; unless otherwise stated estimates include expenditures for new construc
tion, and major additions and alterations, but exclude expenditures for repairs, maintenance, and workrelief construction. Estimates through 1938, except for farm Construction, are from Bureau of Foreign and
Domestic Commerce Series “ Construction A ctivity in Continental United States.”
* Includes repairs of the type for which building permits are usually issed, for 1929 and subsequent years.
Rate o f Expansion
The rate of expansion indicated by table 1 may seem high, but is
entirely feasible. The maximum increments of previous expansion
and the peak annual expenditures for each of the major types of con
struction are shown in table 3. The maximum past increments did
not occur simultaneously. They did, however, in many cases occur
when total construction activity was at or near a peak. The postwar
expansion predicted will start from a very low level of total construc
tion, when the industry is prepared to undertake additional work of
all types.
7
PART 1.— GENERAL FORECAST
States, by T yp e o f Construction and Source o f Funds, 1 9 2 0 -4 3 1
[Millions of dollars]
1932 1933 1934 1935 1936 1937 1938
1939
1940
1941
1942 1943
Type of construction and
source of funds
4,947 3.235 3,617 4,297 5,995 6,293 5,827 7,019 7,602 10,627 12,625 7,196 New construction.*
2,562 1,824 2,106 2,724 3,710 4,302 3,721 4,425 5,053 5,819 3,223 1,990 Private construction.
Residential (nonfarm).*
919 567 719 1,117 1,614 1,715 1,820 2,478 2,659 2,973 1,344 674
817 477
Nonresidential. *
874 706 766 799 1,135 1,461
930
901 1,159 1,444
424
161
394
55
375
366
Commercial.
406 224 260 323 391 483
758 500 340
276
499
Industrial.
250
106 301 301 279 464 730
65
58
58
63
40
5
44
39
81
43
53
67
Religious.
41
48
21
26
64
98
55
55
62
Educational.
81
30
60
72
39
78
82
49
113
10
Social and recreational.
47
54
103
73
105
28
32
47
Hospital and institu
26
37
46
37
27
52
26
20
40
tionai.
32
28
14
34
21
19
16
26
24
Miscellaneous.
26
20
43
454
Farm.*
539
643
485 405
570
170 236 263 413 433 485
759
577 434
Utility.*
517 507
599 315 358 395 528 641
665
176
168 188
146
Railroad.
127
167
174 115 150 136 168 212
19
9
42
44
26
51
37
34
10
35
47
Local transit.
36
69
62
43
32
14
48
22
52
Pipeline.
23
78
10
50
239
179
66
85 122 153
150 102
Electric light and power.
159 68
130
193
49
62
Gas.
63 60
45
80
46
42
70
67
37 37
145
Telephone and tele
97
183
56
59
62
76 105
96
123
56
113
graph.
2,385 1,411 1.511 1,573 2,285 1,991 2,106 2,594 2,549 4,808 9,402 5,206 Public construction.
691
442 231
824
Highway, road and street.*
780
819
1,075 652 699 553 757 766
495 622
Residential building
67
199 413
72 96
36
1
11
0
0
Nonresidential building.
587
858
519 1,512 3,487 1,824
588 262 252 319 645 483
127
55
Educational.
436
61
290
133
192 60 100 136 339 233
Hospital and institu
71
121
28
32
41
37
65
81
56
20
109 48
tional.
49
26
Public administration.
89 152 116
130
181
9
52
258 136
100
15
7
4
Commercial.*
15
22
27
12
18
28
0
10
0
4
Industrial.*
4
14
164 1,264 3,366 1,705
11
5
23
0
0
15
6
41
41
48
4
Social and recreational.
26
53
17
29
18
31
14
Miscellaneous.
21
7
9
11
9
22
10
11
6
0
0
34
38
64
138
385 1,537 4,467 2,110
M ilitary and naval.
57
46
51
50
Reclamation, conservation,
306 204
317
353
301
311
214 239 300 392 395 315
and development.
32
54
81
92
62
47
Water supply.
85 109
123
67
76
134
98
91
138
64
51
84
135
25
Sewage
disposal.
87
66
106 48
8
46
15
20
42
0
All other Federal.
10
35
6
10
10
9
Miscellaneous
non-Federal
149
76
96
132
136
130
104
153
87
50
73
208
(public service enter
prises).
* Farm construction estimated by Bureau of Agricultural Economics, U. S. Department of Agriculture;
includes maintenance and minor repairs.
* Privately owned utilities only.
* Includes culverts, bridges, grade separations and other related work.
* Included with privately financed commercial and industrial construction up to 1934.
The grand totals shown in this table establish a limit for what may
reasonably be expected. They would be the maxima for the past if
the greatest rate of increase had occurred simultaneously for all
types of construction, and if greatest volume had been reached in the
same year for all types.
In almost every respect the United States is better prepared for
sound expansion than after the previous war and in the 1920’s. The
construction industry itself is more mature. The home-mortgage
system is incomparably more satisfactory from the standpoint of both
borrowers and lenders, and has provided useful minimum standards
of construction and environment. Promotional builders following
accepted business-management practices are much more prominent
in the field than 25 years ago, and are likely to increase in prominence
8
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
with tho passage of time. Although the financing machinery for
shoestring rental operations was destroyed by the depression, financ
ing for responsible operators in certain classes of rental housing has
since been provided and rental housing is now recognized as a field
for direct institutional investment. Financing of large commercial
projects is more difficult, but should not prevent construction for
which there is sound economic need.
Planning of postwar work, except for highways, is not so far
advanced as it should be to assure a maximum rate of expansion.
It is nevertheless well ahead of the situation at the end of the pre
vious war, and seems likely to be improved materially before this
war is over.
T a b le 3.— Greatest Year-to-Year Increment and M axim um Annual Expenditure for
Specific Types o f N ew Construction, 1 9 2 0 -4 0 1
Greatest year-to-year
increment
Type of construction and source of funds
Total new construction *
_
_ n ___ _
Amount
(in millions
of dollars)
Years
Maximum annual ex
penditure
Amount
(in millions
of dollars)
Years
4,603
(*>
14,947
(i*3)
Private construction
Residential (nonfarm)............. ........................ .........
N onrosidential_____I___________________________
Commercial................................................. ........
Industrial
___
Religious
.
_
_ _
Educational..... ................ ........................ .........
Social and recreational............ .................... ......
Hospital and institutional............................ ......
M iscellaneous______________________________
Farm___ ____ _________________________________
Residential
__ ......
_ _
Nnnresidential. _ _
. _ _____ _ _
U tility.........................................................................
Railroad........................... ...................................
Local transit_________________ _________ ___
Pipeline_________________ __________________
Electric light and power____________________
Gas................................. ......... ...........................
Telephone and telegraph _ _
3,081
1,560
732
242
266
53
43
90
28
10
150
60
90
639
156
30
59
214
81
99
0)
1921-22
(3)
1924-25
1936-37
1921-22
1921-22
1924-25
1926-27
1937-38
1934-35
1934-35
1934-35
(3)
1922-23
1921-22
1930-31
1922-23
1921-22
1928-29
10,713
5,084
3,180
1,361
967
211
151
317
130
43
570
250
320
1,879
507
85
112
546
219
410
(3)
1925
(3)
1929
1920
1927
1930
1926
1929
1932
1940
1940
1940
(3)
1930
1928
1929
1924
1927
1930
Public construction _
_ ___ _ ..
Highway, road, and street__
State______________________ _________ ______
County__ _____ ____________ ___
_ ____
M unicipal__________________ _______________
Residential building.................. ................................
Nonresidential building________ ____ ___________
Educational.........................................................
Hospital and institutional . . . . . .
Public administration.........................................
Commercial
_
_
Industrial
__
, . _
Social and recreational
M iscellaneous_____________________________
M ilitary and naval__________ ______ —......... .........
Reclamation, conservation, and development_____
Bureau of Reclamation............... ........................
Corps of Engineers . . . . . .
_
_... _.
Tennessee Valley Authority_____ ______ _____
Other ____ ... _ . __ ___ __ - ____
Water supply. _
.
_
...
__ _ _
Sewage disposal.......... ...............................................
All other Federal______________________________
Miscellaneous non-Federal........................................
1,522
309
155
88
66
132
487
203
40
63
5
141
22
13
247
92
15
45
14
18
93
51
15
96
(3)
(3)
1929-30
1920-21
1924-25
1939-40
(8)
1935-36
1938-39
1935-36
/ 1935-36 )
\ 1938-39
1939-40
1935-36
1938-39
1939-40
1934-35
1934-35
1934-35
f 1933-34
\ 1934-35 )J
1934-35
1929-30
1935-36
1939-40
1926-27
4,234
1,329
647
259
423
199
1,135
460
147
258
28
164
56
22
385
418
74
226
38
80
240
214
35
279
(a)
(4
1931
1931
1930
1940
(3)
1925
1931
1932
1940
1940
1928
1939
1940
(3)
1939-40
1936
1936-40
1935
1930
1928
1940
1931
i Converted to 1940 cost levels.
a Includes additions, alterations, modernization, and major repairs of the type for which building permits
are usually issued.
* Year-to-year increments or annual expenditures making up this total were not simultaneous.
PART 1.— GENERAL FORECAST
9
B asic Conditions Governing Postwar Construction
The postwar construction program will be conducted in an en
vironment of economic, social, and technical conditions by which its
character will be largely determined. Some of these can be predicted
with a rather high degree of certainty because of their intrinsic nature,
and others can be predicted with reasonable confidence because of the
unmistakable direction of the forces active. Still others must be
more or less arbitrarily assumed, to establish a frame of ref crones;
these are presented in the section on pages 12 and 13.
DESIGN AND PHYSICAL ENVIRONMENT
It cannot be emphasized too strongly that in design and construc
tion postwar structures will resemble very closely the prewar struc
tures for the same purposes. Development is occurring, and some
experimental or pioneering operations will influence designers, but
this has been the case in the past and has led to varying rates of evo
lution in design. “ Miracle houses” and miracle structures of other
types are not to be expected.
Functional requirements for structures of various types will be un
changed, although recognition of their relative importance is changing
in some instances. An example is the greater emphasis being given
to facilities for customer circulation in retail stores, which is changing
the details of design but having slight effect on the basic structures.
Family living habits, housekeeping operations, and social customs-may
change somewhat, but not sufficiently to have a material effect on
space requirements in proportion to family size. Trailers and other
extremely compact dwelling units have filled a useful place under
emergency conditions, and no doubt will be useful under similar con
ditions in the future. No indications are apparent as yet, however,
that units of this type are generally regarded as satisfactory for per
manent occupancy. Instead, recent market studies show a wide
spread desire on the part of potential home buyers for more space than
has been provided in wartime houses. Replies in these studies have
emphasized a strong desire for larger rooms.
Structures of any type, including dwelling units, require an environ
ment of community services and facilities. Where density of popula
tion is great, this environment must be fairly complex. Health
requires public water supply and sewage systems, hospitals, and clinics;
convenience requires electric service and probably gas, paving, and
local retail and service establishments; elementary social standards
require schools, churches, park and recreation areas and organizations,
etc. All of these requirements mean that some stable system of
community organization is necessary, plus some stable relationship
between dwelling units and community. That entails permanent
attachment of dwelling units to land. Purchase of dwelling units
which can be moved with any change of employment will no doubt
continue to some degree, but such units are most unlikely to constitute
more than a trifling percentage of the total.
MATERIALS AND CONSTRUCTION METHODS
Materials likewise will be essentially the same as before the war,
though development has occurred and is continuing. Greater use
10
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
may be expected of certain materials introduced within recent years,
and tliere are strong indications that other new materials will be
introduced. Specifically, it seems almost certain that panel boards
(plywood, panels made from various fibrous materials, and those made
from inorganic materials) will be more prominent, and it is quite
probable that war-expanded capacity for production of light metals
may lead to considerable increase in their use in construction. These
developments, however, are minor in relation to the pattern of ma
terials as a whole and are altogether comparable to past evolution in
the field. Costs of materials and of equipment for processing, as well
as other considerations, make unlikely the actual realization of the
quite common prediction that walls, partitions, and other major
elements will be molded from plastics or that other such drastic
changes will occur. Plastics will fill a useful place, more prominent
than in the past but still minor. They will be employed as ornamental
elements, as a thin coating to improve appearance and wear-resistance
of plywood and other panel boards, and in other supplementary
applications. At the same time, metals will replace them for many
of the wartime uses in which they were emergency substitutes.
Ultimately their range of usefulness in construction may be increased
considerably by technical developments, but it is difficult to picture
conditions under which they would become important load-bearing
materials. In the latter field, changes are to be expected from
development work in treated wood, rather than in plastics.
For at least a generation, the trend in buildings of all types has been
toward more extensive use of mechanical equipment and a higher
degree of its development. This trend will certainly continue, but
will continue to be limited by considerations of cost. Almost without
exception mechanical items introduced at prices limiting their use to
the luxury market have been progressively reduced in price. A
long-time downward trend may be expected, compared to the prices
for other parts of the buildings, for such equipment items as air-condi
tioning systems. Nevertheless, it must be recognized that such highly
fabricated items of equipment represent many man-hours of manu
facturing labor under any circumstances, in addition to the labor of
installation. They must therefore constitute an appreciable element
of the cost of those buildings in which they are used, and will not be
used within the near future in mass-market houses or similar buildings.
Construction methods have also undergone a long and gradual
evolution. Off-site processing has increased, with site work consist
ing less of fabrication and more of installation. Fabrication at the
site has been segregated to an increasing degree; cutting and other
processing are carried out at temporary shops and followed commonly
by installation by another group of workmen. Greater attention
has been given to scheduling of materials and of material flow, to
timing of operations, and to organization of the work between special
ized gangs to reduce waste motion and lost time. Machinery for
site processing of materials, especially lumber, has been improved
greatly within recent years, with the result of much more widespread
adoption. All of these developments may be expected to continue.
Off-site fabrication of processed materials into panels for floors,
walls and other major elements of houses, although known for many
years, was quite limited in extent prior to the war. Wartime condi
tions expanded this division of the construction industry tremendously.
PART 1.— GENERAL FORECAST
11
Numerous firms have pursued programs of design and development
work, and have made concrete plans for postwar operation. Other
firms having existing plants which could be used have entered the
field only on the basis of contracts for individual housing projects,
and on the whole have made little preparation for continuance under
postwar conditions.
A considerable increase over prewar volume may be expected for
these operations, but here again drastic changes in the general pattern
of the industry seem unlikely. Transportation of panels or sections
of houses is both more difficult and more expensive than that of bulk
building materials. Manufacturing economies are reduced when
great variety must be provided for a large number of individual
purchasers. Panels and sections are not well suited to extensive in
ventory storage, and their manufacture must therefore be dovetailed
quite closely with erection. A study now in progress is sufficiently
advanced to indicate that most of the prefabricators have operated
quite successfully with ingenious but simple and inexpensive plant
facilities, and that it is exceedingly doubtful whether the additional
advantages of an elaborate plant outweigh the additional complica
tions. Problems of site acquisition, site planning, and project plan
ning are enormous for Nation-wide operation of any firm, on a scale
sufficient for erection of thousands of structures a month. Conse
quently forecasts of such operations, with production concentrated
in enormous plants for distribution throughout the country, must be
accepted with great reservation. It is much more likely that pro
duction on a moderate scale and with fairly extensive variety will
occur, probably with some of the firms operating or licensing a
number of such plants in different parts of the country, and with
distribution to promotional builders as well as individual buyers.
A less striking but highly important development is that of the more
extensive off-site processing o f materials, including assembly in some
cases. Among the many steps in this direction may be cited the
manufacture of shower stalls which need only to be fastened in place
and connected to supply and waste lines (introduced about 20 years
ago), the factory fitting of doors (including mortising for locks and
routing for hinges when desired), and the factory finishing of wood
flooring to eliminate sanding, filling, and varnishing after laying.
Further developments having the same purpose of reducing site
operations, and a more widespread adoption of the new products,
may be expected.
The rate of change will be irregular, however, and in many cases
specific changes are likely to require agreements between contractors
and the building-trades unions affected.
Productivity of workers will increase somewhat from prewar and
also from wartime levels. The elements of increased mechanization
and better planning of work have been mentioned. Availability of
materials will remove the difficulties and delays occasioned by use of
some of the wartime substitutes. Ending of wartime labor shortages
will mean higher average competence, when it is no longer necessary
to employ those seriously lacking in skill.
It can certainly be expected that overtime work will be greatly
reduced. Overtime is likely to be important mainly for such rusn
work as commercial modernization which is commonly performed
during operation of an establishment. At the same time, it seems
12
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
almost certain that the wartime modifications of overtime premiums
will be terminated. Total overtime work‘will be small, but the cost
for that which is necessary will be high.
FINANCING OF CONSTRUCTION
The Federal Housing Administration procedure for residential
mortgage lending will certainly be continued, probably with some
minor changes. The advantages of this system to borrowers, pro
motional builders, and lenders have been generally recognized, and
there is every indication that attempts to abolish it will be unsuccessful.
No significant change in interest rate seems likely in the period here
considered. Although the long-range trend is unquestionably down
ward as risk is reduced with greater stability of neighborhoods and
higher construction standards, this is not expected to be effective in
the early postwar years. Inquiry among institutional investors
indicates that they are unlikely in the near future to lower the return
of about 3% percent currently regarded as the minimum acceptable
on direct investment in construction projects.
URBAN REHABILITATION
Although urban rehabilitation is an urgent need, no extensive start
can be expected for a number of years. There will be numerous
specific projects fitting into master city plans—housing, civic and
community facilities, and other— including a few projects constructed
with private funds; these must be regarded as individual undertakings
only. Urban rehabilitation as generally understood, and as it is likely
to occur ultimately, means work of an altogether different order of
magnitude— demolition, rearrangement of streets and utilities, and
changes in land use, on a scale sufficient to produce major changes in
the patterns of whole cities.
Obviously the problems to be solved before any real start can be
made on such efforts are tremendous. Ultimate solution requires new
financial mechanisms, new legislation, and changes in basic attitudes
toward relationships between individual properties and integrated
neighborhoods. Numerous procedures have been proposed for deal
ing with the problems, which cannot be discussed here. Although
some of these nave high merit, a fairly long period must be expected
before any can attain the widespread public acceptance necessary for
general adoption. Hence, within the next few years only limited
progress can be anticipated including, probably, a few small-scale
demonstration projects.
Basic Assum ptions o f Forecast
The conditions stated below are assumed as a basis for the estimates
here given, and are not in any sense either recommendations or fore
casts. Should they not be met, actual construction volume will be
affected correspondingly.
It is assumed herein—
1.
That construction wage rates will be not less than current rates,
and not more than 5 percent above current rates, except for those
workers included in annual wage agreements, and that differentials in
PART 1.— GENERAL FORECAST
13
wage rates between housing and other building, and between main
tenance work and new construction, will be the same in amount and in
geographical coverage as at the start of the war.
2. That no substantial changes will be made in the normal work
week and in overtime premiums from those in effect at the start of the
war.
3. That no substantial price increase will take place for any major
building material, but that, rather, the price level for building ma
terials as a whole will be reduced by about 5 percent within 2 years
from the end of the war. These assumptions are based on strong in
dications of active competition between established producers and new
producers for many of the fabricated metal products, and between
producers of different types of products serving the same ultimate
purpose.
4. (a) That Federal construction policy will be to proceed with
projects desired for the value of the completed facilities, but not to
proceed with any projects for the primary purpose of providing em
ployment. (b) That Federal grants for State and local projects will
be made where the purposes to be served, exclusive of the provision of
employment, are accepted as contributing to national welfare,
(c) That there will be no grants for projects the benefits of which are
almost exclusively local or for the proauction of revenue, but that a
procedure will be established for Federal loans for approved revenueproducing projects, such as improvements to water facilities, municipal
transit systems, etc.
5. That FHA underwriting will not be provided for commercial
construction, and that Federal grants will not be provided for private
construction of any type.
6. That corporation income tax will be reduced by half and excessprofits taxes eliminated on the completion of the war, and that the
individual income tax will be reduced by a third, with this latter
reduction consisting in part of reduction in the higher surtax rates, and
in part of increases in personal and family exemptions.
7. That the so-called “ tax incentive plan” will be rejected. Under
that plan, investment in certain proposed organizations or enterprises
(particularly agencies to buy blighted properties and demolish the
structures in preparation for rehabilitation, and agencies to construct
low-rent housing on the vacated land) would be made an allowable
deduction from the income of the investors before computation of
their income taxes.
Effective Dem and fo r Construction
Except possibly for a few months immediately after the end of the
war, the volume of post-war construction will be established by tbe
customary mechanism of effective demand. The capacity of the
industry has been estimated at 11 billion dollars per year at 1940
prices, to be reached a year after defeat of Japan,2 and thereafter is
subject to such expansion as may be necessary. It may reasonably be
expected that Government controls will be modified and then removed
as severe shortages resulting from the war effort are overcome. Supply*
* See Postwar Capacity and Characteristics of the Construction Industry, in M onthly Labor Review,
M ay 1944; also published (with additional data) as Bulletin 779 of the Bureau of Labor Statistics.
646206°— 45------3
14
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
considerations and capacity of the industry will therefore restrict
volume for a few months only, if at all.
During the period under consideration, construction work of almost
every type will be needed for a great variety of different uses. Much of
this work will be carried out, but other parts will not be. In each
individual case there will be opposing forces, some tending to cause the
owner to proceed and others tending to cause him to postpone or cancel
the undertaking. His decision will be governed as in the past by
whether the expected advantages outweigh the disadvantages, in his
individual circumstances and according to his own evaluation of the
pertinent factors and of their relative importance.
Intangible, but of the greatest importance, are the complex psycho
logical factors commonly grouped together under the phrase, “ public
confidence” or “ business confidence.” It has been a matter of common
observation in the past that these had a great effect on the rate
of construction and of other capital formation. No analysis of these
factors is attempted. If they should move toward either marked
optimism or marked pessimism during the period covered, the volume
of work started would be changed accordingly.
PRIVATE RESIDENTIAL BUILDING
By far the greater part of private residential construction consists of
houses built for sale. Initiation of such housing is governed mainly by
whether there seems to be a profitable market. If it seems likely that
houses are salable at a price yielding a satisfactory profit after meeting
cost of land, construction and overhead expense, construction will
proceed. The builders normally expect that their financial interest in
the houses will end with their sale shortly after completion. Conse
quently, long-range considerations of future construction cost, prob
able developments in design or equipment, permanence of the local
housing need, etc., usually receive little attention in themselves, apart
from that given to their expected effect on selling conditions.
Famihes buying houses, or building for their own occupancy, are
guided by different considerations. Ordinarily home ownership is
regarded as a desirable end in itself, to be sought if family prospects
of continued residence in a locality and continued income from
employment or other sources make it seem feasible. In most cases
purchase or construction of a house is the largest single commitment in
a family’s existence, for which payments must be spread over many
years, and it is entered into with corresponding care. Each family has
certain minimum requirements or expectations in a permanent home,
which must be met if the purchase is to be made. There is some
comparison of the costs of ownersliip with those of renting, and very
careful attention to the down payment required. There is some
interest in the trend of construction costs. When public expectations
are high regarding new developments in building and home equip
ment, there is consideration of the likelihood of greater comforts and
conveniences within the near future, proceeding in some cases to
speculation about early obsolescence of houses without the new
features. Finally, in a great many cases there is weighing of the choice
between making a down payment on a house or purchasing other
durable goods, such as an automobile, furniture, or household
appliances.
PART 1.— GENERAL FORECAST
15
Those building for investment are likewise guided by long-range
considerations, but their thinking is much more financial in nature.
The basic questions are whether probable net return exceeds the
minimum acceptable rate, whether risks seem to be within an allowable
limit, and whether available funds are sufficient for the equity invest
ment needed. These questions mean consideration of expected trends
in construction-cost levels and rental levels, and this latter of course
necessitates consideration of local population and employment.
Although investment-construction has characteristically been residen
tial, a considerable part has been for commercial and other nonresidential purposes.
INDUSTRIAL AND COMMERCIAL CONSTRUCTION
Companies erecting commercial, industrial, or utility structures for
their own use ordinarily do so because they believe that increased
operating profit made possible by new space will exceed all capital,
maintenance, and operating costs. This profit may come from
increased volume of business, or a new type of activity for which old
space was unsuitable, or reduced operating cost. In some cases
the investment in construction, is for protective purposes— to insure
continuance or permit rehabilitation of a going business for which the
existing physical plant has become unsuitable. In any event, the level
of construction and financing costs is of primary importance.
CONSTRUCTION BY NONPROFIT ORGANIZATIONS
For the various nonprofit and community organizations using
physical plant— churches, voluntary (i. e., nonprofit private) hospitals,
recreation agencies, and agencies offering institutional care— the
problem of construction of desired facilities usually becomes that
of raising the necessary funds and of being able to assume the addi
tional annual obligation for debt service and for operation of the new
plant. If the construction is to replace an obsolete building, there may
be no increase in operating cost and in some cases there may even be
a reduction because of a higher grade of structure better suited to
the use. Since construction is usually financed by a special campaign
for funds, ordinarily the decision to build or remodel is not complicated
by considerations of other uses for the money. The conditions most
favorable for such campaigns are a high level of business in combina
tion with high income-tax rates, both of which are now present and
seem likely to be maintained in the postwar period sufficiently to
facilitate this type of undertaking.
PUBLIC CONSTRUCTION
Construction by public bodies financed by tax funds is largely
a matter of public policy. The purpose sought is the better perform
ance of some function accepted as a public responsibility. Decision to
proceed with any specific project is governed therefore by the extent
of recognition of its individual value and the numerous financial
considerations present. Cash on hand, existing bonded debt, debt
limit, effect of the project on the operating budget and the debt service
budget, acceptability and collection prospects for special assessments
and grants from a larger political unit all affect the decision.
The foregoing considerations are not by any means exhaustive, but
are merely an indication of some of the principal factors present.
Part 2.— Demand for Private Construction
Sum m ary
THE volume of construction (exclusive of maintenance and minor
repairs) started during the final year of the war is expected to be 4%
billion dollars at 1940 cost levels, and for the first 5 years thereafter
the average will be 10.9 billion dollars per year, starting at 7.8 billion
dollars in the first year and increasing to 12.1 billion dollars in the
fifth. This estimate assumes that no public construction will be
undertaken mainly to provide employment or stimulate business.
The rate of development in design of structures, materials, construc
tion methods, and organization of the industry has been accelerated
by the wartime program, but resemblances between postwar and
prewar conditions will greatly outweigh the differences.
An average volume of 7.9 billion dollars per year at 1940 cost
levels is expected for private construction started during the first
5 years following defeat of Japan, and a maximum volume of 8.6
billion dollars for such work started during the fifth year. Half
of the total will be nonfarm residential building, about 30 percent
nonfarm nonresidential building, about a seventh will be utility
construction, and the remainder construction on farms. All major
conditions are conducive to active sale of promotional houses, but
apartment construction will be much below former peaks. The average
for private nonfarm residential construction will be 850,000 dwelling
units started per year. Commercial building of 1.2 billion dollars
per year will consist of a substantial volume of new work, but an even
greater volume of additions, alterations, and modernization. Indus
trial construction will be somewhat over half of commercial in volume,
but will consist more largely of new structures and less of additions
and alterations.
Residential-Building Situation
There is every indication of a large potential demand for residential
building. As numerous estimates of the need for such construction
have been made, it is sufficient here merely to mention briefly the
pertinent factors usually grouped under this term. These may be
divided between those apparent from the Housing Census of 1940,
and those which have since developed.
HOUSING SITUATION IN 1940
In 1940 there was a relatively low vacancy ratio, extensive doubling
up of families, appreciable occupancy of irregular units, and use of
several million unfit dwelling units.
The Housing Census reported about 1,400,000 vacant nonfarm
units for sale or rent, which gave a gross vacancy rate of 4.8 percent.
16
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
17
These included 290,000 seasonal units, however, as well as an unknown
number of surplus units in areas of declining population and employ
ment, and substandard or unfit units which, from information given,
must have totaled at least 250,000. Adjustment for these would
reduce the usable vacancy rate to not over 3 percent at the highest,
and probably to not over
percent, in comparison with the figure
of 5 percent generally accepted as a necessary “ cushion.” This
vacancy rate, although not alarming, indicates that no surplus for
future needs was present.
About 1,345,000 “ subfamilies11 were reported as doubled up with
other nonform families,1 exclusive of other forms of doubling not re
ported in the Census. Almost 167,000 families were living in “ other
dwelling places” — boats, tents, trailers, and units of other miscella
neous types.2 In some cases such arrangements were probably the
result of personal preference, but it is likely that more commonly the
motives were financial.
In addition, there were several million substandard units which
could be brought to reasonable standards only at prohibitive expense.
Any estimate of these is hindered by the absence of exact standards,
but value provides a useful guide. More than 4,400,000 occupied
nonfarm units were valued, with land, at less than $1,000 or rented
for less than $10 per month. Although these included some entirely
satisfactory units in localities of low real-estate prices and rent levels,
there can be little doubt that they were greatly outnumbered by
rudimentary and deteriorated and otherwise objectionable units else
where with value or rental above the limits used. Without attempt at
further adjustments which would raise the figure, 4,400,000 may be
taken as a minimum estimate of the number of substandard dwelling
units for which improvement would not be practicable. On the basis
of other criteria, the National Housing Agency has estimated the
number of substandard units in 1940 as approximately 7 million.3
CHANGES SINCE 1 9 4 0
Factors favorable to increased demand.— Since 1940 the number of
families has been increasing rapidly, and this increase may be expected
to continue. The Census Bureau has estimated an increase in all
families from January 1,1940, to January 1, 1955, of almost 7,300,000.4
While the estimated rate of increase varies considerably during this
15-year period, the average is about 485,000 per year. Continuance
of the rural-to-urban population trend would mean an average annual
increase in nonfarm families of perhaps 535,000. Many families are
living for the duration in temporary or unsatisfactory accommodations,
or are sharing quarters with others, because of wartime housing
shortages.. Many of the families recently formed have not yet been
established as households, or have ceased that status temporarily.
These conditions are of course temporary, and on conclusion of the
war will be followed by a sharp increase in demand for normal house
keeping accommodations. The National Housing Agency has esti-*
116th Decennial Census, Population and Housing, Families, General Characteristics, table 10.
* “ Other dwelling places” were counted only when occupied by families having no other regular living
quarters.
* National Housing Bulletin 1: Housing Needs, A Preliminary Estimate (National Housing Agency,
Washington, 1944), p. 16.
* Series P-1943, No. 2: Estimated Number of Families in the United States, 1940 to 1960 (U. S. Bureau
of the Census, September 80, 1943), table 4; medium estimate used.
18
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
mated that 1,400,000 servicemen’s households will be established or
reestablished following the war.6
The tremendous internal migrations to war centers which have
occurred since 1940 will undoubtedly be reversed to a considerable
degree, but probably with the net result of a major permanent shift
in population to industrial centers, particularly in the West and South.
Consequently, housing and population are unlikely to be as well fitted
geographically as before the war. Total housing need may be affected
only slightly by these shifts, but effective demand will be increased.
In areas of declining population, there will seldom be an excess of units
meeting reasonable standards, because substandard units will usually
be greater in number than the reduction in number of families. At
the same time, concentration of the increase in other areas will mean
more acute local shortages, with intensified effect on rental levels and
salability of houses.
Meanwhile there have been both additions to and deductions from
the 1940 housing inventory. In the 4-year period 1940-43, a total of
1,870,000 dwelling units was constructed, exclusive of 313,000 tem
porary public units. Not all of these 1,870,000 units represent perma
nent additional accommodations, however. Considerable numbers
were built in areas where reduction in employment after the war is
likely to bring a housing surplus. Other new units, urban and rural,
were essentially slum dwellings, accepted because of the financial cir
cumstances of their occupants but not constituting a real housing asset.
The number of these is unknown, but detailed study of building-permit
records for certain periods and localities supplemented by additional
information indicates that it was probably about 150,000. Addi
tional increase in dwelling units came from conversion— some of it
permanently useful, and some suited to emergency conditions only.
The net effect of all these changes has been an increase, during the
eriod, of probably not more than 1,700,000 dwelling units which can
e regarded as a permanent housing resource.
Along with this increase, however, has come physical loss from fire
and other disaster, demolition, abandonment,^ and conversion to non
dwelling use. A commonly accepted figure is 50,000 nonfarm units
per year, of which about 20,000 are destroyed by disaster (in most
cases, fire) and most of the remaining 30,000 are demolished. While
data are much less satisfactory for such losses than for new construc
tion, such checks as have been made indicate that the figures are at
least roughly accurate.
Numerous estimates have been made, ordinarily on the basis of age,
of the replacement rate necessary to offset deterioration. It is seldom
because of age alone, however, that buildings reach a stage at which
they cannot be brought to accepted standards of health, safety, and
decency without prohibitive expense. Rather it is because of other
conditions accompanying the passage of time—neglected maintenance,
abuse, change of neighborhood environment, change of accepted
standards affecting the basic structure, etc. Units rendered unfit by
these developments up to 1940 are already included in the estimate of
those needing replacement. By the end of the war, probably at least
500,000 additional pre-1940 units will have deterioriated to such a
state that necessary repairs plus additional work to overcome initial
inadequacy will cost more than their value justifies.
E
•National Housing Bulletin 1, p. 9.
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
19
The average construction rate needed during the first 10 years
following the war has been estimated by the National Housing Agency
at 1,150,000 to 1,610,000 nonfarm dwelling units per year, depending
on the period over which replacement of substandard dwelling units
is to be extended.7 These rates provide for the estimated increase in
the number of families, for establishment or reestablishment of serv
icemen’s households, for reduction in the extent of doubling, for re
placement of units currently deteriorating beyond economical restora
tion, and for replacement over periods ranging from 10 to 30 years of
units already substandard by the end of the war. Discussion is con
centrated somewhat on a replacement period of 20 years, requiring an
annual construction rate of 1,260,000 dwelling units.
These estimates of social need are obviously not intended to repre
sent effective demand. Need and effective demand have not coincided
in the past, and can be expected to coincide for an appreciable period
only through the intervention of some type of control mechanism.
For those wishing to purchase or construct a house, financing terms
are far more favorable than daring previous periods of active con
struction. Under current FHA terms, a down payment of 10 percent
of the appraised value brings ownership with a single mortgage, for a
house selling for $6,000 or less.8 Thus, purchase of a $6,000 house
requires a down payment of $600 plus closing charges, and monthly
payments averaging $35.48 during the period for interest, mortgage
insurance, and amortization over a period of 20 years. Under the
former system of first and junior mortgages, this monthly payment on
such a purchase would ordinarily have been little if any more than
sufficient to pay interest and to provide for the commissions or bonuses
charged for periodical renewal of the short-term junior financing.
In addition, the “ G . 1. Bill of Rights” provides for Federal guaranty
of loans to war veterans. These will enable an indefinite (but probably
large) number of veterans without accumulated funds for an equity
payment to purchase houses. Under section 505 of this bill, the entire
purchase price can be borrowed through an FHA first mortgage for 80
percent of the appraised value, plus a federally guaranteed second
mortgage for 20 percent, but not over $2,000. These loans will affect
the market to some degree for houses selling for as much as $10,000.
Factors unfavorable to increased demand.— These factors favorable
to construction will be partially offset by other considerations, how
ever. Although noncorporate savings are now at an all-time high
and postwar incomes also may be expected to be reasonably high, not
all families wishing a new home will be able to obtain it. More than
half of the nonfarm families receiving income from salaries and wages
on ly9 had incomes under $1,500, and more than a third had incomes
under $1,000 in 1939. Even for 1942, it is estimated on the basis of
earnings in the first quarter that 15 percent of all city families of two
or more persons had incomes under $1,000 during the year, and that
another 12 percent had incomes ranging from $1,000 to $1,500.10*•
» National Housing Bulletin 1, pp. 18-19.
« Under present terms, mortgages are insured up to 90 percent of the first $6,000 plus 80 percent of the
next $4,000 of appraised value of house and land, where this is $10,000 or less, and up to 80 percent of appraised
value where this is over $10,000 but not over $20,000. In practice, selling prices of FHA-financed promotional
houses have ordinarily been the appraised values.
•Individual incomes of less than $50 during the year from other sources were disregarded. Data based
upon Sixteenth Decennial Census, Population and Housing, Families, General Characteristics, table 17.
w See Income and Spending and Saving of City Families in Wartime, in M onthly Labor Review, Sep
tember 1942.
20
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
While postwar incomes may be higher, there is no likelihood that
family incomes below $1,500 and below $1,000 will be eliminated.
Few nonfarm families with such incomes will be able to assume pur
chase or rental obligations for unsubsidized new units. Other families
will be hesitant to undertake home purchase because of uncertainty
regarding future location and future employment. Unquestionably
there will be many families well able to undertake home purchase,
but preferring to use their money otherwise— for automobiles, house
hold appliances, furniture, and in some cases probably for travel. Sales
efforts for all of these items will be active.
Another offsetting factor is the unrealistic picture of postwar
houses which has become somewhat prevalent. Postwar market
surveys made by manufacturers of building materials, by other firms
related to construction, and by trade associations show two fairly
common misconceptions—a somewhat vague expectation of new
materials and basically new design resulting in houses of fundamentally
different character from those of the past, and quite concrete expecta
tion of luxury-grade mechanical equipment, such as true air condi
tioning,11 in inexpensive mass-market houses. An active effort to
correct these impressions has been started through advertisements of
materials manufacturers and others, and is likely to have some success.
It will be reenforced strongly by the postwar houses themselves,
which will be their own demonstration that the numerous irresponsible
promises made by those outside the industry cannot be met at the
present stage of development. Although misunderstanding of what
is feasible will probably hinder purchase of homes for a time, it is
likely to diminish fairly rapidly in influence.
Probable Volum e o f Postwar Residential Construction
P R IV A T E
H OU SIN G
Under these conditions, it is estimated that the average volume of
new private housing will be about 850,000 nonfarm dwelling units
started per year during the 5 years following defeat of Japan, and of
private plus public housing, about 900,000 units. Although this average
of 900,000 units is only about 3 percent above the highest previous
5-year average of 872,000 nonfarm dwelling units per year, realized
from 1923 through 1927, and is below the record of 937,000 attained
in 1925, it is associated with an increasing rather than a decreasing
level of activity. The 1925 peak was followed by successive annual
reductions until a low point of 93,000 was reached in 1932. The post
war Estimate, in contrast, will start from a relatively low level during
the final year of war against Japan only. Volume during this year
will be governed to a large degree by; the time of year when Germany
is defeated. If this occurs in late winter, so that plans for expansion
can be ready early in the period of normal spring expansion, as many
as 350,000 units may be started during the following 12 months. If
the defeat occurs in midsummer or late summer, the effect during the
remainder of the calendar year will probably be slight, and as few as
175.000 units may be started during the first 12 months. From this
range, housing built by private activity is expected to increase to
550.000 units started in the first postwar year, to reach 900,000
u Providing cooling as well as heating, control of humidity, ventilation, and air filtration*
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
21
started in the third postwar year, and to reach 1,040,000 in the fifth
year. The average construction cost of these is expected to be at a
maximum of $4,200 each, at the 1940 cost level, for the units started
during the first postwar year and then to decline gradually to about
$3,550 for those started in the fifth year as simpler and cheaper houses
become a larger part of the total. Estimates of number of dwelling
units started, average construction cost, and total construction cost
are given in the accompanying table.
Num ber and Construction C o st 1 o f Nonfarm Dwelling Units to be Started During Final
Year of the W ar and First 5 Years Thereafter
Privately financed units
Year
Total
number
of units
Publicly financed units
Total
Total
Average
Average
construc construc
construc construc
tion
tion
tion
tion
Number
cost (in Number cost
cost (in
per millions
cost per millions
of
of
unit
unit
dollars)
dollars)
Final year of war......................
254,000
250,000
First 5 post-war years: Average
per year................................... 900,000
850,000
580,000
550,000
1st year............................. .
2d year................................. 825,000
780,000
3d year................................ 955,000
900,000
4th year................................ 1,040.000
980,000
5th year................................ 1,100,000 1,040,000
$4,000
1,000
4,000
$2,500
10
3,750
4,200
4,000
3,800
3.600
3,550
3,200
2,300
3,100
3,400
3,500
3,700
50,000
30,000
45,000
55,000
60,000
60,000
3,200
3,200
3,200
3,200
3.200
3.200
159
95
145
175
190
190
1 Converted to 1940 cost levels. M ultiplication of number of dwelling units by average construction cost
in most cases gives a total construction cost slightly different from that shown, because of rounding of figures.
These operations will be facilitated b y experience gained in the war
housing program, in which both builders and general contractors built
projects of several hundred units. With few exceptions, these projects
were marked by more thorough planning of operations, more careful
timing and control of materials, and greater use of power-operated
tools than were general in prewar promotional building. Numerous
larger contractors accustomed to management procedures were intro
duced to the field of residential work, and many residential builders
learned the possibilities present in large-scale operations. On some
of the largest projects, materials were bought directly from manu
facturers. In these respects, and others, the housebuilding industry
matured substantially.
The result of this development will be projects of larger average
size than before the war. Small operators who build a house or two
at a time are likely to retain a place in the industry almost indefinitely,
but an increasing part of total volume will probably be in projects of
25 to 50 units, and to some degree in projects up to about 100 units.
It is likely that the largest projects of a few hundred units up to a
thousand or more, which became somewhat common under war con
ditions, will be quite unusual when these special circumstances are no
longer present.
The major expansion will come first in the moderately high-priced
group of houses to be sold (with land) for $7,500 up to about $10,000,
and in the considerably smaller field of even higher-priced houses,
both promotional and built on contract, costing up to about $25,000.
Current activity of residential architects indicates, however, that few
mansions are likely to be built.
646206°— 45------4
22
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
The moderately expensive group offers in many respects the most
inviting field for early expansion. It will meet general public ex
pectations best, because the prices will permit more extensive use of
mechanical equipment and of the more-expensive newer materials
than will the prices of the cheaper houses. These differences—in
plumbing, heating, electrical installations, lighting, electrical appli
ances, closets and cabinets, glass blocks, tile and other ornamental
treatment— are the features most effective in selling. Competition
for the early market is likely to be primarily on the basis of design,
finish, and equipment rather than price, with percent of gross profit
higher than for cheaper houses.
This expansion will start as soon as metal products for the mechan
ical trades and also domestic appliances are available to the extent
needed for this market—probably about 6 months after the end of
the war— and will continue as the variety of mechanical, metal, and
appliance items reaches its prewar state.
While the field described will lead the expansion, it is not sufficient
to bring the expected total volume, nor can it sustain its own volume
for more than a few years. Only a minority of those desiring to
purchase can pay $7,500 or more. Operations at lower prices mean
lower gross profit per unit and will require more thorough planning
of operations, but offer large rewards for those able to satisfy customer
demand within allowable cost limits.
As in the past, the moderately large projects will commonly be in
outlying locations where large tracts of land are available. Because
of problems already mentioned, little progress can be expected during
early postwar years in use of urban sites which have passed through
a sequence of blight followed by demolition for rehabilitation. In
creasing attention has recently been given, however, to the land
resource provided in most cities by sparsely built subdivisions of the
1920’s. Although some of these tracts are unsuitable, many of them
are potentially good residential areas, well located, already provided
with sewer and water lines and, not infrequently, provided also with
sidewalks and paving. Unless another wave of speculation in vacant
land develops, it will be cheaper to buy such lots even in those cases
in which purchase and demolition of a few shacks is necessary to
improve environment than to install utilities in raw land. It seems
likely, therefore, that there will be a significant start on a new type
of development, in which fairly large projects are built on scattered
sites in a general neighborhood, with some existing houses inter
spersed between groups of new houses.
Private rental units will probably form a considerably smaller part
of the total than in the past, and will be mainly in apartment buildings.
Units in 2-family buildings reached their peak both in number and in
percentage in 1923, when 175,000 were built, and have since declined
greatly in importance. It seems unlikely that their average during
the first 5 postwar years will exceed 50,000.
The building of apartments will be more active, but these are un
likely to approach either their prewar peak of 257,000 or the promi
nence they are likely to attain some years after the period under
consideration. In the early postwar period, not much over i00,000
apartment units per year seems likely. In accordance with a long
time trend, average size will probably decline. Most of the units
are likely to consist of 3 rooms or less, suitable for families without
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
23
children or for temporary households consisting of groups of employed
men or employed women. Many of these small units will be supplied
with furnishings.
The apartment-house type of enterprise is now in a transitional
stage. Although a substantial volume of apartments was built for
permanent investment by individuals or organizations, for about two
decades ending with the depression, the basic pattern was established
to an increasing degree by speculative builders whose intention was
to sell the property at the capitalized value of imputed earning
power—that is, a price at which there would be a stated percentage
yield to the owner annually if expected or assumed rental income and
ownership expense were maintained. These operations were depend
ent almost solely on availability of sufficient financing, which during
the height of this development was commonly obtained by means of
appraisals also based on capitalization of imputed earning power.
The opportunity for abuses given by this procedure have been so
generally recognized, and the resulting losses have been so wide
spread and so severe, that it is unlikely to be revived on an extensive
scale.
Instead, apartment construction will be motivated primarily by
investment considerations. That means change toward much larger
projects than were formerly customary, both to facilitate management
and maintenance and to protect the investment through unified con
trol of a development large enough to establish its own neighborhood
characteristics. While there will be a rental market for such projects
in the moderately high rental range of $15 monthly per room and over,
the great market is for housing at lower rates. Demand for apart
ments is based partly on the freedom of the occupants from mainte
nance responsibilities and partly on the locations of the buildings, but
in the case of families with children, mainly on lower rents than are
necessary for detached houses providing comparable accommodations.
As the monthly rental for acceptable units in acceptable locations
falls, the number of possible tenants increases very rapidly, with
probably the majority of all possible tenants not able to pay more
than $8 monthly per room including heat. The market for 5- and
6-room apartments at higher rentals will probably be reduced through
home purchase by many families able to pay these higher rentals.
This reduction in market will be least in the largest cities, and will
occur over a fairly long period, but may be expected to have at least
latent influence at all times.
Through FHA, loans are available up to 80 percent of appraised
value for responsible operators planning on permanent ownership.
Those will be used for construction of numerous projects of the
“ village” type, commonly in outlying or suburban locations. As in
existing projects of this type, rentals will be suitable primarily for
families with income considerably above average, families without
children, and temporary housekeeping groups. The risks of luxurygrade apartments, with monthly rentals of $25 per room and over,
arc such that mortgages will be available only in unusually favorable
circumstances. There have been several notable instances of direct
investment in apartment projects by insurance companies, several
such projects are scheduled for the early postwar period, and it seems
likely that housing will ultimately become an accepted major field for
institutional investment. Before that occurs, however, legislation
24
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
permitting such use of fiduciary funds, as well as certain other develop
ments, will be necessary in most States.12 Recent inquiry indicates
that few if any insurance companies other than those which have
already constructed housing projects as investments are planning to
do so in the near future.
To fill the potential demand for low-rental apartments will require
a lower yield to owners and mortgage holders than has been customary
for apartment investment, availability of suitably located land, and
the utmost economy in construction through skillful design and care
fully planned operations. Ultimate meeting of this last condition
will probably be accompanied by some reorganization of this part of
the construction industry, resulting in greater integration of operations
between the different kinds of site work and more direct procurement
of materials. It will also require a more uniform pattern of annual
operation to reduce the traditional lost time from seasonal unemploy
ment of construction workers—possibly from encouragement of off
season work by annual wage agreements, possibly through some
mechanism for seasonal variation in wage rates and material prices,
possibly through other means. It seems very likely that in the 5
years immediately after the war these conditions may be met some
what better than in the past, but not yet sufficiently well to make new
apartments available to any substantial number of industrial workers
or persons of similar incomes.
Full development of apartment construction must be mainly in
projects suitable for average-income workers, who cannot afford
expensive commuting and who will ordinarily prefer to live fairly
close to places of employment. It is thus tied directly to the cities*
problem of salvaging their deteriorated areas, which for the most
>art are well located for housing use and would ordinarily provide
arge areas suitable for efficient and attractive housing developments.
Maturity of this potentially important part of the private housing
field is therefore not to be expected until substantial progress has
been made in solving the exceedingly complex problems of urban
rehabilitation.
{
PUBLIC HOUSING
Public housing will be discussed in part 3 of this series in somewhat
more detail, with other types of public construction. It is expected
to be at a very low rate during the final year of the war, with perhaps
about 4,000 dwelling units started, and to reach an average level of
about 50,000 units started per year during the 5 years following
defeat of Japan.
ADDITIONS, ALTERATIONS, AND REPAIRS
There will be heavy demand for work on existing structures.
Owners will want to obtain rooms in attics or other unfinished space,
to add complete or partial baths, to replace obsolete plumbing, heating
and wiring, in some cases to obtain additional space, and to make
numerous other improvements. Owners of sound but old-fashioned
apartments will want to modernize them. Both owners* funds and
13 California, New Jersey, New York, and Virginia are the only States in which legislation has specifically
irmitted insurance companies to invest in ownership of rental housing, and the only States in which such
has occurred (other than through foreclosure). Legislation has been enacted in Massachusetts,
gvestment
but has not yet gone into effect. In a number of other States such investment is not expressly forbidden,
but its legality is regarded by some as not entirely clear. In the remaining States such investment is defi
nitely illegal
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
25
credit machinery will be available, and an average volume of $750,000,000 per year may be expected in alterations, modernization and
improvements. In most cases, this work is likely to be postponed a
few months until shortages of materials are relieved, but then will
expand rapidly. It is expected to reach $800,000,000 during the
second year after defeat of Japan, reach a peak of $850,000,000 the
next year, and then fall off slowly as the accumulated demand is mot.
It will be necessary for owners, whether occupants or landlords, to
proceed with maintenance operations which have been curtailed
during the war. This work— decorating, exterior painting and other
protective treatment, nonemergency repairs postponed from the war
period, and emergency repairs—is estimated at an average of about
$40 annually per existing dwelling unit, or approximately $1,400,000,000 per year. Since it requires less materials proportionately
than other types of work it will probably increase very rapidly, but
will nevertheless be spread over a considerable period. Such mainte
nance work is expected to reach a peak of 1% billion dollars in the first
year after the end of the war, and then to fall off quite slowly.
NonresidentiaUBuilding Situation
COMMERCIAL BUILDING
There will be a very large volume of commercial-building work—
probably an average of $1,200,000,000 annually for the first 5 post
war years, and a peak of $1,350,000,000 during the third and also the
fourth of those years. For comparison, the greatest previous peak
at the same 1940 level of costs was $1,361,000,000 reached in 1929,
and the greatest 5-year annual average was $1,242,000,000 maintained
from 1926 through 1930.
Although very close to these earlier peak periods in total volume,
postwar commercial construction will be quite different in its com
position. New work will be little more than a third of the total,
and will consist characteristically of much smaller projects. Much
more important will be modernization and alterations, which will
expand to an early peak in the second year following the end of the
war, and then fall off somewhat slowly as new work reaches a sus
tained level.
N ew Construction
Additional commercial space will be needed, but under conditions
bringing a different type of activity from that of the 1920’s, and
specifically with comparatively few of the multi-million-dollar
projects of the type which commemorate the excesses of that period
of commercial budding.
Retad space will be needed because of general and local growth in
population, changes in distribution methods, and obsolescence of
existing buildings. In growing localities, neighborhood shopping
facdities wdl be needed. This need wdl be acute wherever intensive
housing development occurs in vacant or sparsely settled areas, which
necessardy will be the areas used for most of the larger housing proj
ects. To a noticeable degree these wdl be unified shopping centers
with off-the-street parking space, of the type which began to attain
prominence shortly before the war, and it is likely that many of these
26
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
will be built in conjunction with the larger promotional housing and
village-type apartment projects.
Changed distribution methods will also bring about some construc
tion. Food stores particularly will want additional building designed
for so-called “ supermarket” type of operation, to replace older quar
ters less suitable for this use. Department stores in the major cities
will continue their shift toward outlying and suburban localities, with
construction of additional branch stores. Little expansion of down
town department-store space may be expected except in those cities
having permanent and substantial gains in population. There will,
however, be continued replacement of obsolete nonfireproof buildings,
although in the larger cities this process is already well advanced.
Likewise, there will be construction of new commercial buildings, either
company-owned or built on lease, for department store, dry goods, and
apparel chains, to replace the unsatisfactory rented quarters occupied
by some of their outlets.
There will be a wide variety of other commercial construction, but
probably no individual projects comparable to the largest of those
built before the depression. Overbuilding of office space has been
so great that even now there are vacancies in prominent buildings in
some cities, and except for war requirements there would be extensive
vacancy in most of the larger cities. Therefore, some office-biiilding
construction may be expected in cities showing net growth after the
war, and some elsewhere under special circumstances, but only a
small fraction of former peaks. Firms needing store or office space
for their own use are likely to be much more cautious than in the
past regarding construction of additional stories for rental as offices.
Obsolete buildings on high-value land will ordinarily be replaced,
if at all, with comparatively cheap “ taxpayer” type buildings, with
stores at the street level and not more than a single floor of office
space above.
The current shortage of hotel accommodations is largely temporary,
resulting from wartime conditions. In some cities there is permanent
need for additional hotel facilities and, in fact, a small volume is current
ly under construction. There will be some replacement of oldfashioned buildings by well-known hotels having established clienteles
for which their buildings are no longer suitable, but the greater part
of this replacement has already been carried out. There will also be
gradual replacement of less prominent older hotels in many cities.
In a few localities there is a potential market for additional luxurygrade hotels, primarily for residential rather than transient occupancy,
and this will no doubt be supplied wherever the demand seems to be
permanent. Uncritical building of elaborate hotels from considera
tions of civic prestige, or as an indefinitely expansible field for invest
ment, will be curtailed by the disastrous financial record of the hotel
business. Except for the largest cities, restoration of automobile
travel will have an adverse effect on patronage, by diverting travelers
to motor courts, especially since these are likely to increase in number
and to improve as regards the average grade of accommodations
offered.
Small buildings, although no longer the dominant pattern for
neighborhood retailing, will be built contain ng one or a few stores
suitable for almost any kind of business. The trend toward estab
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
27
lishments for “ drive-in” patronage by city motorists has been apparent
for some years and is likely to be accelerated. Thus far, this has been
most notable for restaurants and food stores, but it has already been
extended to laundries and other service establishments. There will
also be active construction of establishments, particularly motor
courts, for tourists’ patronage. Although “ tourist cabins” in many
parts of the country have often been little more than shacks, sub
stantial and comfortable accommodations with private baths have
already spread extensively since they were introduced in the Far West
some 15 to 20 years ago. These are likely to make up a very large
part of the new construction for motorists, occupancy. In addition,
there will be new roadside restaurants, and fairly extensive replace
ment of gasoline stations in both urban and rural locations.
M odernization
In the commercial field, new construction will be exceeded by
modernization for which an average volume of $750,000,000 per year
is expected. Older office buildings, hotels, department stores, and
smaller commercial buildings in cities of all sizes will require this
treatment. Many such buildings are well located, structurally sound,
fire-resistive, and in general well suited to their purposes, but at a
serious competitive disadvantage because of inconvenient or ineffi
cient room arrangement, obsolete plumbing, heating, and other
mechanical equipment, poor arrangements for internal traffic, or
unattractive appearance of public spaces such as entrance or lobby.
Modernization of these buildings, for which the cost will be only a
small fraction of the cost of new construction, will represent a real
economic necessity to their owners. The cost of individual projects
will in some cases be several hundred thousand dollars, and perhaps
occasionally a million dollars or more, although ordinarily it will be
much less.
All types of work will be included, but special emphasis will be on
those using metals. The prewar trend to installation of escalators
for concentrated passenger movement of a few stories will certainly
be resumed. Elevator machinery and controlling mechanisms will,
be replaced, in order to increase hourly passenger capacity and reduce
maintenance; cabs, doors, and enclosures will be replaced to improve
appearance. Heating facilities in large buildings will be modernized
to save fuel. Modernization of lighting will be widespread and will
be accompanied by replacement of wiring not meeting modern stand
ards. In some buildings there will be augmentation of plumbing
installations. Installation of air-conditioning systems in retail es
tablishments of all types, in amusement buildings, and in certain
public parts of hotels will be extensive.
Nonmechanical work will be largely that affecting appearance and,
in retail establishments, the display of goods and internal traffic. It
will be concentrated on exteriors, show windows, entrances, and wall
treatment for lobbies and other public spaces. Where room arrange
ment is poor or room sizes inefficient, partitions will be moved.
For smaller store buildings the need will be principally for refurbish
ing with new lighting, new store fronts and entrances, in some cases
new finish floors or building exteriors, and other work bringing modern
ization of appearance. A great number of these smaller establish
ments will likewise install air-conditioning systems or, perhaps more
28
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
commonly, air-cooling systems without the humidity-control feature
of true air conditioning. A special commercial group will be the
establishments intended for patronage by highway users— gasoline
stations, restaurants, motor courts, etc.— whose owners will be
anxious to prepare them for restored traffic volume as soon as
relaxation of restrictions permits.
An appreciable volume of commercial alteration and modernization
work will be carried out by those chain stores which operate principally
in downtown and other high-rental locations. To an increasing degree
these companies have adopted their own standardized store designs,
which not only identify their outlets but also meet the special require
ments of their methods of operation. This results in some alteration
work at all times, for opening of new units and changes of location.
In addition, however, a number of these firms contemplate moderniza
tion of their exteriors and other distinctive features in accordance with
trends in retail operations and in commercial architecture since their
designs were originally adopted. It is also likely that standard designs
will be adopted by additional companies.
In general, financing of commercial construction and modernization
of the types mentioned should present no difficulties. The new con
struction and modernization will provide special advantages to the
occupants, and in most cases the space provided will be rentable with
out difficulty to other tenants should occasion for such action arise.
The chain stores and other firms wishing to rent specially constructed
new buildings in general will be regarded as a preferred group of tenants
with financial stability much above that of retailers as a whole. The
cost level of building work, and the price levels for various materials,
will of course affect volume and in specific modernization projects will
affect the extent of the work. Relatively high land prices in good
commercial locations and the high rent levels which such locations can
support mean, however, that building costs are less important than
for residential construction.
INDUSTRIAL CONSTRUCTION
Industrial construction will be needed, but the extent of the need is
more uncertain than for other types. On the. basis of available infor
mation, an average volume of $690,000,000 annually is estimated for
the first 5 postwar years. It is expected that new construction will
rise to a peak of $550,000,000 in work started during the fifth year,
with an annual average of $440,000,000 for the period, and that
additions, alterations, and modernization will reach a maximum level
of $300,000,000 started per year during the second and third years,
with a 5-year average of $250,000,000 per year. The volume of work
for which architects or engineers have already been engaged is still
small, but near the end of 1944 was about 6 times as great as at the
beginning of the year. Further acceleration in the rate of preparation
seems likely.
Private industrial construction was within or somewhat below the
range of 500 million to 700 million dollars annually from 1921 through
1928, but this period was preceded by a peak of 967 million dollars in
1920 and followed by a secondary peak of 942 million dollars in 1929.
No such rapid expansion, with the peak reached so soon after the end
of the war, seems likely. The greatest period of industrial construction
in the history of the United States is nearing its end, but there is ex
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
29
tensive doubt about the peacetime usefulness of many plants which
have been constructed. Some are suitable only for the manufacture
of products for which peacetime demand will probably be small; some
were built in isolated localities for military reasons, and are badly
situated for civilian use; some are so large and so closely fitted to a
specific pattern of operations that it is doubtful whether they can be
used efficiently for postwar manufacturing. The remaining plants are
presumably suitable for postwar production, but the availability of
the large number built with Government funds will not be known
until policies for their disposal are adopted. Until such policies are
announced, many decisions on private industrial construction will
remain tentative. Quite understandably there is a tendency to
reticence on the part of many firms having concrete plans for
new postwar products, with accompanying plans for necessary
construction.
Even so, volume is likely to be substantial. There are indications
of expansion in the food and textile fields. Geographical shift is
likely for some industries. Expansion of paper making and other
wood-pulp industries in the South is almost certain, because of the
rapid growth rate of suitable trees. Some expansion of metal-using
industries above prewar level is also likely in the South, and rather
considerable expansion in the Far West. Aluminum fabrication may
expand in the Northwest, but this development is dependent on
conditions beyond local control. Other geographical expansions are
likely, to varying degree; in general, it seems likely that there will be
an appreciable growth of manufacturing in the less-industrialized
regions of the country.
In addition, there will be many expansions for which war-built
plants cannot be used. Some new products, particularly chemicals,
require highly specialized facilities which cannot be obtained eco
nomically by conversion of existing structures. In some cases expan
sion or the addition of specific facilities to existing plants will be
needed to bring balance between different parts for postwar produc
tion. Another somewhat similar type of need, is that for replace
ment at existing plants of obsolete and unsatisfactory buildings, par
ticularly older buildings which are no longer suitable for newer
products and improved production methods. There is at all times
a certain amount of alteration and addition to industrial plants as a
whole, and this will certainly be increased substantially by prepara
tions for postwar competition.
Financing is of primary importance, and will present widely varying
problems to individual firms. Some have liquid assets sufficient for
their contemplated capital expenditures, and those which have issued
good securities to the public in the past or which make products well
known to the general public will probably have little difficulty in
marketing any necessary securities. There are definite indications,
however, that firms without existing underwriting connections and
not recognized by the general public will have serious difficulty in
obtaining funds for plant expansion. This will be the case especially
for those requiring specialized structures which cannot be used readily
for the manufacture of other products.
646206°— 45------5
30
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
O TH E R P R IV A T E BU ILD IN G CONSTRUCTION
Other private nonfarm building construction will be largely that
of nonprofit organizations— churches, schools and colleges, hospitals,
and so forth. For all of these, the primary questions are availability
of construction funds and ability to assume responsibility for mainte
nance and operation of the new facilities. Conditions for fund
raising are more favorable than they have been for 15 years, and are
expected to continue so. As a result, organizations of most of these
types throughout the country are in differing stages of preparation
for contemplated postwar construction. This work is unlikely to
increase greatly from its reduced wartime level until Japan is defeated,
except that church buildings seem likely to be started in fair volume
dining the final year of war against Japan only. Thereafter the
entire group will expand rapidly, to an annual average of about
$380,000,000 during the ensuing 5 years.
Articles in the architectural magazines and reports from other
sources indicate a larger volume of religious buildings at the stage of
plan preparation than for many years. A compilation of the tenta
tive building schedule of more than 15 major denominations indicates
a probable 5-year average of $155,000,000 for all religious groups.
Some of this is for new church buildings, some for replacement of
temporary or outworn buildings, some for additions to existing
buildings including those left unfinished when first built, with the
intention of completion at a later date, and some for improvements
and modernization.
Private-school work is also reaching the stage of architectural
design. A considerable part of this is for endowed or church-sponsored
colleges, some for church-sponsored lower schools, and a certain
amount for academies and other schools operated as business
enterprises.
Preliminary tabulation of a questionnaire circulated by a com
mittee of the American Hospital Association among member and
nonmember hospitals indicated the likelihood of an extensive pro
gram of hospital construction. The report issued to date is pro
visional, but supports other indications. The increasing use of
hospital facilities for conditions once treated at home is facilitated
by widespread adoption of the “ Blue Cross” hospital-insurance plan9
operated jointly by the hospitals themselves, which tends to smooth
out occupancy and at the same time alleviate the great operating
problem of collection losses. It is estimated that average annual
volume will be about $75,000,000 for construction alone.
Since most of the nonpublic hospital space is provided by nonprofit
organizations, the question of whether funds can be raised is impor
tant. The preliminary report of the Hospital Association’s com
mittee indicated fairly widespread concern regarding this particular
problem on the part of hospital officials, and also indicated some
wish for Federal grants. However, the favorable conditions for
fund raising by other nonprofit organizations will apply to hospitals
also, and should permit the volume estimated.
The construction work will include additions as well as new build
ings, but comparatively little alteration and modernization work.
The purpose or the latter obviously must be that of making the hos
pital plant more suitable for its specialized and highly technical
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
31
functions, which is sometimes exceedingly difficult. Lack of balance
can often be overcome by addition of specific facilities, and localized
faults in arrangement overcome by alterations, but more general
shoitcomings are not ordinarily subject to such correction. Where
buildings are not fire-resistive or were designed without appreciation
of the requirements of efficient operation, the improvement to be
obtained through alterations will commonly not be Worth the cost.
The modernization project likely to be most widely carried out will
be installation of air conditioning for operating rooms, delivery
rooms, preparation rooms, and in some cases, nurseries.
Institutional care for the able-bodied aged and, except for rather
brief periods, for dependent children is now generally regarded as
obsolete, and existing facilities in many localities are more than ade
quate by current standards. Future construction is likely to be small.
There will be an expansion of construction by those nonprofit
recreational and cultural agencies which conduct their activities
largely in central buildings. The best known of these are the Y. M.
C. A. and Y. W. C. A., but this group includes other federated or
ganizations and a great number of strictly local organizations. Pre
liminary architectural steps have been taken in numerous cases, and
some progress has been made in raising funds. The program will
consist largely of replacement and modernization of existing buildings.
Because of the financial burden of maintaining and operating addi
tional space, new construction other than for replacement is expected
to be concentrated on facilities which will increase membership and
thus increase operating income, and on buildings in areas where the
agencies have been poorly developed in the past. There will also be
some construction of buildings of fraternal organizations, but this will
probably be limited by the foreclosures during the depression on
property of even some of the best-known lodges.
P u blic-U tility Situation
The estimates in the utility field are based primarily on past records
of construction expenditures, in conjunction with such additional in
formation as could be obtained from trade associations and the head
quarters offices of national utility companies. No attempt was made
to canvass the individual operating companies. Postwar plans are
still rather uncertain in this field, although it includes companies
long noted for their careful planning of capital expenditure programs.
There has been extensive study of possible improvement programs
and fair progress in planning specific projects, but for the most part
final decisions on the scale of expenditures remain to be made. Fur
thermore, in some cases decisions between alternative ways of accom
plishing a given purpose will probably be postponed until the post
war period, especially in the communications field. This will permit
comparison of the various tentative plans on the basis of current
cost levels, and in the light of the latest technical developments
which might affect the decisions.
Subject to these qualifications, it is expected that average volume
of utility construction started in the first 5 postwar years will be
about $1,140,000,000.
A substantial part of utility construction at any time consists of
extension of distribution facilities to additional customers. Another
32
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
substantial part consists of improvements to the general plant, in
most cases individually rather small, to bring it into better balance
with the load upon it. Some large projects are contemplated, but
utility construction as a whole is not synonymous with large under
takings.
For the most part, financing will not be a serious problem. The
earning record in most parts of the field has been good, and a fairly
large volume of refunding to obtain lower interest rates has occurred
within recent months. In the weakest part of the general field, that
of railroads, a number of companies enjoy high credit and some have
improved their credit by debt reduction from wartime earnings, but
others will have great difficulty in borrowing money for construction
purposes. Most of the last group, although their long-time financial
condition is poor, will have on hand depreciation and other reserves
which can be used for minor construction work.
RAILROADS
Railroad construction is estimated at an average of $360,000,000
per year, made up for the most part of fairly small jobs. Most of
this will be nonbuilding work carried out on the roadway, on bridges,
and on signal and other communication and control facilities. Its
purpose will be to facilitate operation, correct causes of delay or con
gestion, improve safety, and reduce maintenance costs. Tliere may
be some replacement of outgrown smaller stations and probably will
be some degree of modernization of other stations, in accordance
with recent trends in design. Replacement of obsolete stations is
needed in a number of cities, including some of the largest metro
politan centers. Those familiar with the field believe that the larger
projects will not be undertaken until a later period. It is very likely
that there will be some construction of shops and service pits especially
designed for Diesel locomotives and other new-type equipment, but
this work will be a small part of the construction program.
LOCAL T R AN SIT
There is every indication of a large capital improvement program
for local transit systems, but in most localities this will consist almost
exclusively of purchase of new busses and streetcars, and construction
will be limited principally to shops, garages, and other supplementary
facilities. No instances are known in which major extensions of car
tracks are contemplated. It is likely, however, that there will be
cases of major track reconstruction or relocation in conjunction with
improvement of principal urban traffic routes, to fit the streetcar
routes into the master traffic plans being carried out. There wall also
be fairly extensive overhead construction for trolley busses in a num
ber of localities, but this type of work is relatively minor in proportion
to mileage provided.
The only major construction projects in prospect are in New York
and Chicago, where the work will be financed with public funds.
The program of the New York City Planning Commission includes
capital expenditures of somewhat over $125,000,000 for local trans
portation, of which roughly $100,000,000 is for construction.
Although city appropriations for this program are some $65,000,000
PART 2.— DEMAND FOR PRIVATE CONSTRUCTION
33
to date, execution as proposed is dependent on Federal grants of about
$45,000,000 as well as on additional city appropriations. It is there
fore uncertain how much of this program will be carried out. The
construction work contemplated consists of miscellaneous improve
ments to present plant, a number of connecting links to join portions
of the city-owned subway and elevated system, and one major exten
sion to that system. The Chicago program is completion of the initial
part of the west-side subway which had been under construction as a
PWA project until work was stopped by the war. Subways have
been proposed or are under discussion in several other cities, but it
seems somewhat unlikely that any of these will be started within the
period covered by the estimate.
COMMUNICATIONS
A large construction program in the communications field is sched
uled, estimated tentatively at an average of $350,000,000 per year for
the first 5 years after the war. Because of the highly technical
nature of the field, the active program of engineering development
in progress at all times, and the many assumptions which must be
made regarding future technical and economic conditions, plans of the
major companies are undergoing continued study. The upward
trend in public use is shown by the fact that, at their lowest depres
sion point in 1933, long-distance telephone conversations were only a
quarter in number below their 1930 peak, and in 1937 exceeded this
previous peak. This trend will be stimulated to some degree by new
types of service in the postwar period. The consolidation of the
telegraph companies which occurred late in 1943 will result in ultimate
integration of physical facilities, and may be expected to accelerate
the program of capital improvements.
Additional message capacity, service to additional users, and facili
ties for new types of service will be obtained in part by additional
equipment and in part by construction, of which the largest single
element is likely to be overhead and underground cable lines.
Although buildings of several types will be needed, they will constitute
a minor part of total construction.
G A S, ELECTRIC S E R V IC E , AND PIPE LIN E S
No compilations are available on proposed construction by gas
companies, but there are indications that it will be fairly substantial.
A considerable part of the new residential building will be on sites
already having gas service, but much of it will not be. In addition,
gas service wm be wanted for some war-built housing projects now
using bottled gas. Where there is retained population growth or
increase in industrial use, the additional consumption will in some
cases necessitate additional generating and storage facilities, and addi
tional capacity for the mains. Construction cost of this work is esti
mated at $75,000,000 per year.
Electric light and power expansion was at its highest level during
the 8 years from 1923 through 1930. During each of these years
construction exceeded $400,000,000 and during 3 of the years it
exceeded $500,000,000 for the private utility companies alone. Con
struction has declined since 1941, being limited by scarcities of the
34
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
critical materials needed. After the war there will be need for service
to new areas and growing areas, as well as increased service to older
areas with increasing levels of consumption, and some replacement of
obsolete plant. The extent to which additional generating plant will
be needed is not known. Recently, current consumption has declined
somewhat from its earlier wartime peak, but the long-range trend is
consistently upward. In the absence of more concrete imormation,
volume is estimated at $300,000,000 per year.
Pipeline construction is estimated at only about $25,000,000 per
year, in the absence of other information. This would consist pri
marily of extensions to existing lines, and construction of collecting
lines in oil- or gas-producing areas. Financial success of the “ big
inch,, line has been so very much greater than was expected that it
would seem to presage construction of other interregional lines, but
this may not be the case. Continuous operation at full capacity will
be considerably more difficult to maintain than under wartime con
trols, and a larger fleet of tankers than ever before will be available.
Consequently, no lines of this type have been included in the estimate.
Part, 3.— D em and for Public Construction
Summary
THE average annual volume of construction started (exclusive of
maintenance and minor repairs) during the first 5 years following
defeat of Japan is expected to be 10.9 billion dollars at 1940 cost
levels, with a maximum of 12.1 billion dollars in the fifth year. Pub
licly financed construction will make up about 3 billion dollars of this
average figure, increasing from about 2.1 billion dollars in the first
postwar year to almost 3.5 billion dollars in the fifth. The largest
single item will be private residential building, which with alterations
and modernization will comprise more than a third of total construc
tion, and which will consist primarily of detached houses built for sale.
Apartment construction will be active, but will not approach its p#edepression rate until a number of developments occur at a later time.
The volume of commercial construction will be close to that of the
1920's, but will consist more of modernization than of new buildings.
Preparation for public construction varies extensively among the
different government bodies. Although still unsatisfactory, it has
improved substantially during the past year and is likely to improve
further. On the whole, non-Federal bodies are basing their programs
on expectation of Federal aid or new sources of tax revenue. The
largest element of public construction will be highway work, estimated
at 1.3 billion dollars per year plus $600,000,000 in maintenance. A
fairly extensive program of reclamation, conservation, and develop
ment is likely, for which both the U. S. Corps of Engineers and the
Interior Department have working plans ready. Schools will be the
largest item of building construction, considerably larger than all other
types of public buildings combined. Sewer and water projects seem
to be the most strongly felt need of local government units, as indi
cated by the advanced state of preparation of working plans.
Public-Construction Situation
The types and extent of public construction at any time are a
reflection of current public policy. This construction is carried out by
or for thousands of different bodies— the Federal Government, the
State governments, counties, townships, municipalities, boards of
education and park boards, sanitary and water districts, government
corporations, and various others.
Although traditionally a project is financed by the body by which
it is to be maintained or operated, there have been exceptions. The
earliest of these were the national roads constructed by the Federal
Government, well over a century ago, because they were regarded as
having national rather than merely local value. The recent grants to
States and local bodies made under the Federal Works program, in
35
36
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
large part to stimulate employment and raise the level of business
activity, were intended also to improve the national welfare through
providing improved facilities for public services. This latter considera
tion was one influence in the choice of activities for employmentproducing expenditures.
What any State or local government unit spends for construction
will be governed in part by its financial condition, but unquestionably
will be influenced by the extent to which grants or nonlocal tax rev
enues are available. The current financial condition of local govern
ment units on the whole is very good, but this is principally the result
of wartime conditions—unusually good tax collections because of
wartime business and employment levels, combined with suspension
of all but the most urgent capital expenditures. With few new bond
issues to offset retirement of maturing bonds, a substantial margin of
borrowing power has been built up, and in many cases liquid assets
have been accumulated as well. This condition will permit an active
start on postwar construction, but is regarded as merely temporary
by numerous authorities on public administration and municipal
finances. Preliminary schedules of postwar improvement programs
presented by States and municipalities have in a large number of cases
included the direct or implied statement that execution of the proposed
work was dependent on some form of Federal grant. This viewpoint
was expressed with the greatest frankness by Robert Moses in a
memorandum, dated February 1, 1944, which he issued as chairman
of the Triborough Bridge Authority of the City of New York.1
Obviously the volume of public construction which will actually take
place will be governed by broad decisions on public policy which have
not yet been made. If projects are to be constructed because of a
recognized immediate need for the physical facilities to be provided,
the volume during this period will be less than if projects which would
otherwise have been postponed to a later date are advanced in order to
provide employment. It has been assumed for the purpose of the
estimate that the former of these policies will be adopted, but this as
sumption may be incorrect. As a result, the estimates of specific
types of public construction may be regarded as conservative and in
most cases are below the potential programs of public bodies.
Similarly it has been assumed that Federal grants will be provided
for those State and local projects recognized as valuable to the Nation
as a whole. This assumption would include grants for projects such
as highways, schools or hospitals, and other institutions, but not for
projects of primarily local benefit such as construction of public ad
ministration buildings or paving of purely local streets. If this as
sumption is not met and there are no grants other than those for the
Federal-aid highway system, the local construction program will be
delayed and the volume during the early postwar years will be sub
stantially below that estimated. Conversely, appropriations to
stimulate employment will bring an increase.
It has also been assumed that some effective procedure of Federal
loans will be established for revenue-producing local improvements,
consisting largely of municipally owned utilities. These loans would
be in the form of revenue bonds, secured by the operating revenue from
1 Function and Degree of Participation of the Federal Government in the Construction of Postwar
Federal, State and Local Public Works (published by City of New York with a transmittal letter addressed
to Hon. Fritz G. Lanbam, Chairman of the Committee on Public Buildings and Grounds of the House of
Representatives).
PART 3.— DEMAND FOR PUBLIC CONSTRUCTION
37
the improvements. This procedure will be important for those gov
ernment units whose bonds are not yet reapproved for fiduciary in
vestment, because of defaults which occurred during the depression.
It may be even more important for other government units in permit
ting them to segregate the financing of these improvements in bonds
secured only by operating revenue, which are distinct from the general
bonds secured by the full faith and credit of the municipality and are
exempt from the debt limit existing for these general bonds.
Starting of public work is dependent not only on accessibility of
funds and of land but also on availability of detailed working drawings
with specifications. Obtaining needed land can be a time-consuming
process, but in most cases need not be. If there is definite decision
on the property needed, and if the purpose of the project is accepted as
unquestionably a public use, in most States possession can be obtained
with slight delay by condemnation, even though legal determination
of the price to be paid may be in process and may, indeed* continue
over a long period. Acquisition in this manner is likely to be more
expensive than by negotiation in advance, because there is no oppor
tunity to choose among a number of suitable sites on the basis of
negotiations with their respective owners. It is, however, an alter
native to prolonged delay when site purchase has not been undertaken
sufficiently in advance. Furthermore, information from a consider
able number of government bodies indicates that a rather substantial
part of the total land needed for contemplated public construction is
already publicly owned.
For preparation of drawings and specifications there are few short
cuts, except for certain kinds of work. The time required varies with
the type, size, and complexity of the project, but for a project of any
magnitude is likely to be at least several months. Basic designs for
some types of work are fairly well standardized, but other types require
preliminary surveys and careful study of alternative designs before
work on the final drawings can be started.
Design preparation is somewhat meager, but has advanced during
the past year and shows signs of further acceleration. Prepara
tion has gone farthest for State highway work. For other work, it is
improved but still spotty. Early in 1944, architectural sources re
ported that little public work had reached the design stage, except that
in and near New York City and Los Angeles. Since then, architects
have been engaged for projects in many other parts of the country, but
still there are some extensive areas and a great number of local political
bodies for which this step has not yet been taken. The report on the
subject,2 published jointly by the Federal Works Agency and the
Bureau of the Census in September 1944, notes that there were 29,270
projects (other than Federal-aid and State highways) having a total
estimated cost exclusive of land of $5,969,000,000, which were in at
least a preliminary stage of preparation on July 1, 1944.3 Of these,
plans were completed for not quite a fourth, having about a sixth of
total cost; design was in progress for somewhat over a fourth, both in
2 Report of Proposed Post-War Public Works: Volume and Status of the Plan Preparation of Post-War
Public Works Proposed by State and Local Governments, prepared at the request of the Special Committee
on Post-War Economic Policy and Planning, House of Representatives, by the Federal Works Agency in
collaboration with the Bureau of the Census.
« That report summarizes data obtained from 1,480 government units—44 States, 731 counties, 593 cities,
and 112 special districts. All information given is for those 1,480 units exclusively, rather than an estimate
for all State and local government units in continental United States. Estimated expenditures are, in
general, at the cost levels expected by the various units when the work is carried out.
38
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
number and in cost; and the remainder were in a preliminary stage
only. In addition, 27,513 projects with estimated cost excluding land
of $5,665,000,000 were in what was termed the “ idea stage” (i. e., being
contemplated as possibilities).
The seriousness of this situation is indicated by the concentration
of plans in limited areas. New York City alone reported 29 percent
of all completed plans, in terms of value, while the other 4 cities
having populations over 1,000,000— Chicago, Philadelphia, Detroit,
and Los Angeles—reported 9 percent of the total. These 5 cities
reported almost 42 percent of all work currently in the design stage.
Furthermore, almost a sixth of the 1,480 public bodies reporting—
237— had no plans in any stage of preparation. Of the remaining
1,243, only 600 had completed plans for any of their projects at the
time o f submitting their reports. Reports on ability to complete
plans for their projects in the design, preliminary, and idea stage
showed that 535 units would be able to carry plans to completion,
while 689 would not. For this latter group there were two principal
reasons—lack of funds, and legal restrictions which prevent numerous
government bodies from spending money on plans for any project
until its construction is officially authorized.
With respect to construction funds, the current state of prepara
tion is likewise incomplete. According to the same report, for the
projects having completed plans, 31.4 percent of necessary funds were
on hand or arranged for; for those on which design was in progress,
14.8 percent; for those in preliminary stages, 7.2 percent; and for
those in the “ idea stage,” 5.5 percent. Negotiations were currently
under way for about 5 percent of necessary funds for the first 3 of
these groups, and for about 3 percent of funds for the projects in the
“ idea stage.” Even for those projects for which plans were complete,
little more than a third of the necessary funds was on hand, arranged
for, or under negotiation.
It is apparent that, with respect to both planning and financing,
much remains to be done if public construction is to be started as
early as needed. There are indications that this situation is being
increasingly recognized.
Probable Volum e o f Postwar P ublic Construction
H IG H W A Y S, ROADS, AND STREETS
The most important single element of public construction will be
highway, road, and street work. It will be necessary ultimately to
bring the entire street and highway system into conformity with
traffic requirements, including, of course, the provision of access to
new localities. This will mean work to improve the traffic flow and
reduce the accident hazard on primary highways, extension of the
all-weather mileage of minor roads, and relief for urban traffic con
gestion. In many cases work will consist of improvements to exist
ing highways, such as construction of additional lanes or replacement
of sharp curves, excessive grades, and other localized defects. In
other cases it will be necessary to replace outworn pavement, while
in some cases it will be more satisfactory to construct new highway
on new right of way, for the heaviest concentrations of traffic. Work
on structures will also be important—new bridges and culverts, re
PART 3.— DEMAND FOR PUBLIC CONSTRUCTION
39
placement of bridges and culverts not meeting modern traffic require
ments, and grade separations.
Work within cities is likely to emphasize the arterial-street system
and access portion of intercity highways to a greater extent than
formerly. In some cases satisfactory treatment will require widening
or relocation of right-of-way, which may necessitate demolition op
buildings. This procedure involves large expenditures for purposes
other than construction, and thus will take place over a fairly long
period. Other city paving is likely to be fairly small in volume,
except for repairs and replacement and for work in new areas actually
undergoing development. Difficulties in collecting special assess
ments during the last 15 years have made city officials cautious about
provision of improvements in undeveloped areas.
The Federal Works Agency and Census Bureau report above cited
shows that of Federal aid and State highway projects to cost almost
$2,200,000,000, plans had been completed for 10 percent by July 1,
1944, and were in preparation for another 43 % percent. It com
mented on the rapid progress in preparation of plans, and expressed
the opinion that plans would probably be available for at least the
volume of work that could be financed for the first 3 postwar years.
State highway revenues, balances in the various State highway funds,
and probable Federal aid would permit expenditures of approximately
$1,000,000,000 per year during this period, for construction plus en
gineering and land acquisition.
Highway, street, and road projects not in the State and Federalaid systems, which were in the preliminary planning stage or be
yond, reported somewhat over $1,500,000,000 in estimated cost ex
clusive of land, of which plans had been completed for about 15
percent and were in progress for another 25 percent. These figures
include bridges, viaducts, and grade separations, as well as grading
and paving.
The total of all new highway and related construction may be
estimated at an average of $1,300,000,000 per year, at 1940 price
levels*
In addition, there will be a large volume of maintenance. Defi
nitions of maintenance vary somewhat between State highway de
partments and other bodies carrying on road work, but in general it
is regarded as meaning prevention and correction of deterioration by
repairs, patching, and routine operations such as periodical scraping
of gravel surfaces. Even during the curtailments of war years such
maintenance has been above $400,000,000 in value per year. It is
likely that an average annual expenditure will be $600,000,000 in the
first 5 postwar years, in part for current needs and in part to over
come the deterioration resulting from past curtailments and from
heavy concentration of wartime traffic.
PU B LIC HOUSING
The construction rate for wartime public housing has been falling
rapidly for almost 2 years, and it seems unlikely that any substantial
number of dwelling units will be started during the final year before
defeat of Japan. The number during that year is estimated at about
4,000, although this may be increased somewhat by unforeseen re
quirements of war production.
40
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
When the war is over, a fairly rapid increase may be expected in
construction of permanent slum-clearance projects by local housing
authorities, with an average of 50,000 dwelling units started annually
during the first 5 years. It is estimated that about 30,000 units will
be started during the first year, most of .these during the latter part
of the year when difficulties of material supply are alleviated, and
that the annual construction rate will increase to about 60,000 during
the fourth and fifth years. Average construction cost during the
period is estimated at about $160,000,000, at 1940 cost levels.
It is recognized that public housing has been subjected to detailed
criticism, and to some degree of attack. There is a widespread desire
to give every opportunity, and in fact every reasonable assistance, to
private operators to meet as much of the housing need as is possible.
Nevertheless there is fairly general recognition that an acute need
exists for housing of families unable to meet full commercial charges
for decent accommodations, whether new or used. There is accom
panying recognition that slum-clearance housing projects provided
for such families have been civic assets, both in the physical facilities
provided and in the accompanying removal of what was often the
worst of the slum buildings. It is therefore believed that public
housing will be constructed on a moderate scale, but with close
observation of the results being achieved.
In New York State approximately 18,000 public dwelling units are
scheduled for construction within the early postwar period, most of
these within New York City. Drawings and specifications are com
pleted for many of these and well advanced for others, and numerous
sites have been acquired. Because of State legislation, financing is
not dependent on actions or available funds of the National Housing
Agency. Elsewhere, preparations have been made through the stage
of signed loan contracts between local housing authorities and Na
tional Housing Agency or its predecessors for some 25,500 dwelling
units in slum-clearance projects still postponed because of the war.
It seems likely that many of these will be built, although the increase
in building costs since 1941 introduces financial and legal problems.
It is also possible that a few local housing authorities having suffi
ciently high credit will construct additional projects even without
grants from other bodies. Apart from these, it is thought, from
>roposed legislation and published but unofficial expressions of legisative opinion, that sufficient Federal financing will be provided to
permit a total program of the size estimated.
{
SCHOOL BU ILDINGS
Schools are the public buildings most urgently needed. One
educational authority has estimated that there is extremely urgent
need for capital expenditure of at least $3,000,000,000 within the
first 5 years after the war for public schools and colleges, and that
additional capital expenditure of $4,000,000,000 during this period
would be highly desirable. About two-thirds of each figure is for
construction proper, the remainder being for equipment, architectural
services, and in some cases, land. The estimate includes rural schools,
urban schools below college level, and public colleges and universities.
Plans to date are not commensurate with such a program, but the
situation in this respect is likely to be improved materially. Al
PART 3.— DEMAND FOR PUBLIC CONSTRUCTION
41
though school design has been undergoing fairly extensive develop
ment for more than a decade, this is an architectural field in which
requirements are rather widely understood, and in which certain basic
designs are applicable with minor modification to different localities
of similar composition and similar climate. In fact, a few cases are
known in which architects specializing in school work have retained
their staffs during dull periods to prepare tentative drawings for
schools of common types and sizes in order to have plans ready, when
needed, for modification and completion to fit individual requirements.
An average volume of $400,000,000 per year is estimated for new
work, additions, alterations, and improvements. This is expected to
begin with $250,000,000 in work started during the first postwar
year, and to amount to $450,000,000 annually during the third,
fourth, and fifth years. Annual expenditure was above $400,000,000
at 1940 cost levels for 6 successive years ending with 1929, and was
somewhat above $450,000,000 in 1925 and 1926, but this pre-depression
period was marked by a combination of stimulating factors— spread
of the junior-high-school system with its need for new buildings,
movement of urban population from older residential areas to out
lying and suburban areas, widespread realization that nonfireproof
urban schools needed replacement, and of course the viewpoint of
the period favorable to physical improvements of almost all kinds.
HOSPITALS AN D IN STITU TIONS
Hospitals and institutional buildings, including sanitoria and mental
hospitals, will probably be built to the extent of about $75,000,000
per year. The Veterans Administration plans an annual expenditure
of $20,000,000 per year for veterans’ hospitals alone—probably
replacement of temporary hospitals built during the war, for the
most part. This figure includes equipment and other nonconstruc
tion costs, and the remainder must be deflated to about $12,000,000
annually at 1940 price levels. In addition, States and local govern
ment units have projects in various stages of preparation for general
hospitals, mental and other specialized hospitals, sanitoria, training
and custodial institutions for the handicapped, institutions for the
aged,5 and establishments of numerous minor types. In part this
proposed work will provide increased capacity in accordance with
greater public recognition of the need present, and in part will replace
existing buildings which—in some classifications especially— are badly
suited to their purposes.
Because of the greatly increased recognition of the value of hospitals
especially, and of other public institutions to a lesser degree, it is
expected that funds will be available for the volume of construction
estimated. The present state of plan preparation indicates readiness
for this volume.
PU B LIC ADM IN ISTRATION BU ILD ING S
The Federal building program is directed by the Public Buildings
Administration, which submits to Congress the building programs
proposed. After Congressional approval and accompanying authori
« While old-age assistance and social-security benefits are supplanting institutional care for the ablebodied aged, they do not affect the need for such care for the infirm, chronically sick, or handicapped.
42
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
zation of funds, a committee representing PBA and the executive
agencies selects specific projects from the approved list, after which
land is purchased, drawings are prepared, and contracts are awarded.
This activity is divided between work in the District of Columbia
and work elsewhere. For the former, a study of space requirements
has been made by PBA on the basis of expected reductions in personnel,
return of some agencies transferred from Washington, release and
demolition of unsuitable buildings, and restoration of the space per
employee to the figure found from experience to permit best efficiency.
The proposed program based on this study calls for demolition of
temporary and obsolete buildings with about 6,000,000 square feet
of space, release of about 3,400,000 square feet of rented space, and
construction of new permanent buildings with about 6,000,000 square
feet. Construction cost of this program would be about $15,000,000
per year for 5 years at 1940 levels of prices.
For buildings outside of Washington, a tentative program consisting
of 3,000 buildings throughout the country has been prepared by
PBA for submission to Congress. In accordance with established
procedure, this list will be approved with or without modification,
and then annual or biennial appropriations will be made establishing
the construction rate. Past appropriations suggest a rate somewhat
over $50,000,000 per year at 1940 cost levels.
These buildings will be of all types and sizes. Some will be simple,
single-purpose buildings such as border-patrol stations or small post
offices, while a few will be comparable to metropolitan office buildings.
For a number of years it has been the policy, in designing custom
houses, post-office buildings, and other specialized buildings, to provide
space for those other Federal offices in the same cities which could
use this space advantageously. This policy has been followed in
preparation of the tentative program.
If land is not already owned it can be obtained within 30 days if
necessary, by a declaration of seizure. For smaller buildings needed
in quantity, mainly small post offices, numerous standard designs
have been in use for some years, which can be modified within 30
to 45 days to fit individual requirements. This could not be done,
of course, in the case of larger buildings or those for less-standardized
uses, for which preparation of drawings ordinarily requires 6 months
to a year or more, depending on the size and characteristics of the
building wanted.
State and local government units are planning for buildings of
many types. No comprehensive tabulation by type is available, but
reports from individual government bodies indicate that most proj
ects will be for operating departments—fire stations, shops for publicwork activities, and other strictly utilitarian structures. There will
also, however, be both additions and new buildings for city halls,
courthouses, and public offices, to overcome crowding and to replace
obsolete buildings.
Publicly financed industrial buildings have been important only
under war conditions or when war was imminent, and commercial
buildings have been minor at all times. It is expected that these
will be few in number and small, limited to those built in conjunction
with other types of work.
PART 3.— DEMAND FOR PUBLIC CONSTRUCTION
43
M ILIT A R Y A N D N A V A L CONSTRUCTION
Military and naval construction in continental United States will
probably be fairly small— about $60,000,000 per year—since cur
tailment rather than expansion of the total military and naval estab
lishment is expected. This work is likely to consist largely of
improvement to existing establishments to make them better suited
for postwar operation.
A IR PO R T CONSTRUCTION
There will certainly be a large public construction program for
aviation facilities, for which a tentative estimate is $75,000,000 per
year. Large expansion of commercial aviation over prewar levels
may be expected, as well as some expansion of private flying. The
wartime construction has been enormous, but with some exceptions
military requirements meant location of new fields where they will
have but limited value for postwar civilian use.
The principal agency in this field is the Civil Aeronautics Adminis
tration, but numerous States, counties, and municipalities have also
carried out varying degrees of planning. Although no formal proram will exist until Congressional authority is given, the subject is
eing studied carefully and rather detailed programs have been pre
pared for submission to Congress.
Whatever the extent of the program authorized, it seems likely to
consist of two principal types of facilities: (1) Metropolitan airports
capable of accommodating the largest planes and the heaviest traffic
volume, to be built close to the center of the city. Average construc
tion cost will be about $20,000,000 each. Because of the area re
quired, these can be built only in cities located on suitable bodies of
water where land can be created by filling in. The cost ofjbuying a
sufficient area of improved property near the downtown section, on
which it would be necessary to demolish all buildings, would obviously
be prohibitive. (2) Smaller airports on natural land, in several size
groups intended for corresponding classes of expected traffic volume.
Preliminary estimate of construction cost for these is from $80,000
to $360,000 each, depending on size.
It is expected that land will be provided and supplementary ex
penses (such as those for legal services) will be paid by local sponsors,
ordinarily municipalities. This preparation has lagged thus far and
start of work will in many cases by delayed unless planning is accel
erated. The preparation time required, including that for design,
ranges from 9 months for the smallest airports up to 2 years for the
metropolitan airports to be built on filled-in land.
E
RE C LA M A TIO N 9 CON SE R VA TIO N , AN D D EVELO PM EN T
Comprehensive plans for reclamation, conservation, and develop
ment work have been prepared by the Corps of Engineers and by the
Interior Department, and construction can therefore be started on
short notice. Proposals affecting the contemplated programs of
both of these agencies have been made for unified development, of the
TYA type, for six major river systems. Other proposed projects
44
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
include the St. Lawrence Seaway, for which a large part of the construc
tion would be performed in Canada.
The purposes to be served include improvement of navigation;
flood control, erosion control, and soil improvement; irrigation; the
generation, transmission, and distribution of electric power; and the
provision of recreational areas. Some projects will serve a single
purpose, particularly improvement of navigation, while others will
contribute to most if not all of those listed. All this work is heavy
engineering, but includes a variety of types of construction, of which
dredging, rock removal, moving of earth, and construction of dams,
locks, piers, and facilities for generation and distribution of elec
tricity will be the most important.
Public policy on expenditures will affect the volume of work on
projects within this general classification more than that on most
others. There is seldom the immediate urgency that there is, for
example, for relief of overcrowded schools or hospitals. Results of
earlier development work, and particularly the value of many of
the completed projects to the war production program, have been
an effective demonstration that these undertakings augment the
Nation’s resources and productive capacity. Hence there seems to
be little chance that they will be regarded merely as means of creat
ing employment and stimulating business. An average volume of
$350,000,000 annually during the first 5 postwar years is estimated,
with a range from $275,000,000 in the first year to $400,000,000 in
the fourth and also in the fifth year.
SE W E R AND W A T E R FA CILITIE S
Sewer, sanitation, and water-supply projects are local undertakings,
except that in metropolitan areas they are not uncommonly con
structed and operated by special districts for several municipalities
and the intervening unincorporated territory. Their importance, par
ticularly as regards sewage-treatment facilities, is considerably more
than local because of the effect on other localities.
After the war there will be extension of service to growing neighbor
hoods, both those formerly dormant and those entirely new, and
provision of public facilities— especially for sewage—in smaller
municipalities formerly lacking such improvement. In cities already
providing water and sewage service there will be development of new
sources of water supply, increase of capacity for pumping stations
and primary distribution mains, construction of water-treatment
plants, and construction or enlargement of sewage-treatment plants.
Considerably greater attention than in the past is likely to be given
treatment of industrial wastes, with provision made in part through
public plants and in part through private facilities at industrial estab
lishments producing objectionable liquids.
As might be surmised, sustained level for sewer and water construc
tion was greatest during the pre-depression period when residential
and other building was at its height and when urban subdivisions were
being marketed in greatest number. From 1925 through 1929, aver
age annual volume was about $180,000,000 for sewer construction
and about $155,000,000 for water.
The estimated averages during the first 5 years after the war are,
respectively, $200,000,000 for sewage facilities and $150,000,000 for
PART 3.— DEMAND FOR PUBLIC CONSTRUCTION
45
water. Widespread public recognition of the importance of such
projects is indicated by the fact that they lead all other types of work
reported to the Federal Works Agency by local government units, as
regards estimated cost of work for which plans were completed on
July 1,1944, and also for which plans were in preparation on that date.
There will of course be caution about proceeding in vacant new sub
divisions and other vacant areas, but the influence of this factor is
reflected in the estimate.
Financing should present no difficulties for any justified project.
Water service is a revenue-producing utility, the rates for which in
clude debt service as well as operating costs. A considerable part of
the cost of sewer work will be paid from special assessments. Collec
tion risks will commonly be avoided by requiring the property owners
to pay the assessments prior to start of the work, when they desire
construction in vacant areas or areas where property values are spec
ulative. The several forms of “ sewer rental” by which property
owners or occupants are charged separately for sewage service have
been adopted in relatively few cities, but in the course of time may
become inportant as a source of funds for debt service.
PA R K S A N D R E C R EA T IO N A L FA CILITIE S
This work consists in part of buildings such as auditoriums, field
houses, and shelters, and in part of grading, landscaping, construction
of swimming pools and beaches, and other outdoor work. The ex
penditure level for buildings alone rose rather consistently during the
1920’s to a peak of $56,000,000 in 1928 and then, after depression
curtailment, increased again with somewhat less regularity through
1939. Recent newspaper accounts show strong public support for
some proposed projects. Nevertheless, this is one of the smaller
classes of public construction and one likely to be subordinated to
schools, hospitals, and other types of work which are generally re
garded as more urgent. Volume is estimated at $70,000,000 per year.
Part 4 .— Site Em ploym ent in Postwar New Construction
Sum m ary
EXECUTION of the postwar new-eonstruetion program will mean
employment for an estimated average of 1,840,000 site workers during
the first year following the end of the war, and for an estimated
average of approximately 2,840,000 during the fourth and fifth years.
These figures represent the estimated full-time jobs to be available,
and not the total number of different people receiving employment;
because of turnover in the labor force, including temporary entrance
into it on the part of some, the latter figures would be perceptibly
higher. Dining the first year the number of jobs will increase within
the pattern of seasonal variation, so that employment early in the
year will be below the estimated average, while during the latter part
of the year it will be higher. By the fourth and fifth years employ
ment will have reached virtual stability.
Slightly over half of these workers will be skilled, including fore
men; the semiskilled group will be somewhat over 10 percent of the
total; and the unskilled group will be almost three-eighths of the total.
The remainder— about 2 percent—will consist of general and other
superintendents, job clerks, and others doing administrative work.
Laborers will constitute the largest occupational group. Among
the skilled workers, the most numerous will be carpenters, who will
constitute about 45 percent of this group. The other occupations
expected to make up 5 percent or more of the skilled group are masons,
equipment operators, painters, and plumbers. Almost half of the
semiskilled workers will be truck drivers, and about a sixth will be in
the closely related occupations of bricklayers’ and plasterers’ helpers
(hod carriers).
The estimated figures take account of expected changes in materials
and methods affecting productivity, and are below estimates made
on the basis of man-hour requirements in 1940 by about 2% percent in
the first year and by almost 9 percent in the third and subsequent
years. These adjustments are based on observation of recent de
velopments in the construction industry, and are necessarily approxi
mate. These, and the estimate as a whole, are regarded as substan
tially accurate, but are subject to revision on the basis of additional
data and after more detailed study.
This report is an estimate of the site employment necessary to
perform the new construction1 previously estimated for the first 5
years following defeat of Japan. It is valid only as related to that
forecast and cannot be regarded as an estimate of the site employ
ment resulting from any other volume of construction work which
may be carried out. The forecast of construction work to be started
assumed that authorization of publicly financed projects would be
governed by immediate need for the completed facilities, without
consideration for the resulting employment. Should this assumption
not be met, the volume of employment would be changed substan1The employment estimated is for new construction including additions, alterations, modernization, and
major repairs of the type for which building permits are usually issued, but excluding maintenance and
minor repairs.
46
PART 4.— SITE EM PLOYM ENT IN CONSTRUCTION
47
tially. Total site employment in new construction would be reduced
by as much as 15 percent by a policy of drastic retrenchment in public
expenditures, with postponement of all except the most urgently
needed construction projects. Conversely, total site employment
might be increased from the estimated figures by 25 percent or even
more, if creation of employment were a major consideration in decisions
on public expenditures for construction activity.
Scope and M ethod o f the Study
The estimates here given are based on past studies relating con
struction volume to man-hours of site employment for the major types
of projects, similar studies of the distribution of man-hours by occupa
tions, and observation of recent trends in methods, machinery and
materials which are expected to affect the number of site hours per
unit of output in several important types of construction. Briefly,
the estimate is derived as follows: The dollar volume of each major
type of construction is first converted to man-hours, on the basis of
former studies above mentioned; these are adjusted, where appro
priate, for the lag between the start and the execution of work, to give
timing of the employment represented; the adjusted man-hours are
then converted to man-years (i. e., to the number of full-time jobs
available); these man-years are distributed among the major con
struction occupations, to show the employment which would be
available in each under 1940 conditions (used in the forecast of volume
and the other studies on which this estimate is based); and finally
this employment is adjusted downward to allow for the increased
productivity which is expected to affect several important types of
construction work.
These estimates cover only site employment in new construction,
and not the total employment of construction workers. There will
be additional employment, not included in the estimate, for more than
a million workers in maintenance and minor repairs carried out on
existing structures. This includes a wide range of work performed to
overcome deterioration— painting and decorating, roof repairs, re
placement of leaking pipes and rain gutters, patching of holes or
breaks in highway pavement, etc. This employment will be supplied
by contractors who undertake such work, by industrial and commer
cial establishments and public bodies employing regular maintenance
crews, and by property owners who employ workers on an hourly or
jobbing basis for these services. In addition, some construction
workers will be employed in their own trades at nonconstruction work
in manufacturing (such as wiring or sheet-metal work for specially
designed machines), and an unknown but probably rather small part
of the construction labor force will be employed in nonconstruction
occupations during the less active parts of the year.
Relation o f Construction E m ploym ent to Construction Volume
Site employment in construction is directly related to the volume of
operations currently in progress, and is not in any sense an independ
ent entity. Unlike manufacturing operations, construction offers
no “ cushion” of production for inventory or expected future orders.2*
* Promotional building seems to be an exception, but the difference is more apparent than real; from the
standpoint under consideration, a project for a given number of houses for which land has been purchased
and financing arranged is altogether comparable to a contract for other construction.
48
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
Contractors hire mechanics, helpers, and laborers to perform work on
specific construction projects, and have no effective use for their
services in any other manner.
Employment at the site of construction can be estimated for the
actual or expected construction volume during any period, on the
basis of the value of work completed per man-hour. For any partic
ular type of construction, there is a good deal of uniformity in the
physical measure of work completed per man-hour between groups of
projects, even though individual projects may vary from the average
because of unique conditions. The value of a completed construction
job is made up of the wage cost, the cost of the materials used, numer
ous overhead items, and profit. Since the physical measure under
any given set of general conditions is uniform for a group of projects,
the value is uniform also, subject of course to geographical differences
in wage rates and material prices, and over a period of time subject to
changes in price levels for these and other elements in the total value.
Table 1 shows estimates of the volume of new construction, by the
principal major types, to be started during the final year of war
against Japan only and during each of the first 5 years thereafter.
The value figures in this table are based on 1940 construction costs,
assuming the methods and working conditions as well as the material
prices and wage rates of that year. It should be noted that the fore
cast refers to work started rather than work performed during each of
the years shown.
T able 1.— Estimated Value o f N ew Construction To B e Started During Fined W ar Year
ana First 5 Years Thereafter
1
Value (in millions of dollars)
Type of construction and source of funds
First 5 postwar years
Final
war
year3 First Second Third Fourth Fifth
Total new construction3............ .... ....................... 4,460
Private construction................................................. 3,045
Residential (nonfarm)........................................ 1,250
New construction........................................ 1,000
Additions, alterations, modernization, and
major repairs.............................................
250
Nonresidential.................................................. .
780
Commercial......................................... ........
275
New construction................................ .
150
Additions, alterations, modernization,
and major repairs...............................
125
Industrial.....................................................
375
New construction.................................
175
Additions, alterations, modernization,
and major repairs...............................
200
Religious......................................................
50
Educational.................................................
25
Social and recreational................................
15
Hospital and institutional...........................
30
Miscellaneous..............................................
10
Farm (residential and nonresidential)..............
325
Utility *..............................................................
690
Railroad......... . ......... ..................................
300
Local transit................................................
15
Pipe line.......................................................
25
150
Electric light and power.............................
Gas...............................................................
50
Telephone and telegraph.............................
150
See footnotes at end of table.
7,890
10,870 11,805
11,990 12,065
Aver
age
10,924
2,850
2,300
8,015
3,900
3,100
8,560
4,250
3,400
8,545
4,300
3,500
8,595
4,450
3,700
7,896
3,050
3,200
550
1,530
750
250
800
2,400
1,300
400
850
2,550
1,350
500
800
2,550
1,350
550
750
2,450
1,250
550
750
2,296
1,200
450
500
500
300
900
700
400
850
750
450
800
750
500
700
750
550
750
690
440
200
100
60
50
50
20
425
960
350
25
25
250
60
250
300
150
75
75
75
25
525
1,190
400
40
25
300
75
350
300
175
80
85
85
25
550
1,210
350
45
25
300
90
400
250
175
80
85
85
25
550
1,145
350
45
25
300
75
350
200
175
80
85
85
25
500
1,195
350
45
25
350
75
350
250
155
75
76
76
24
510
1,140
360
40
25
300
75
340
49
PART 4.— SITE EM PLOYM ENT IN CONSTRUCTION
T able 1.— Estim ated Value o f N ew Construction To B e Started During Fined W ar Year
and First 5 Years Thereafter1—Continued
Value (in millions of dollars)
Type of construction and source of funds
Final
war
year3 First
Public construction.................................................. 1,415 2,125
Highway, road, and street1...............................
900
500
Residential building.........................................
95
10
Nonresidential building.....................................
380
420
Educational.................................................
250
100
Hospital and institutional...........................
45
35
Public administration..... ...........................
75
50
Commercial and industrial.........................
0
225
Miscellaneous............................ .................
10
10
Military and naval............................................
100
200
Civil aviation.....................................................
60
0
275
Reclamation, conservation, and development..
100
110
Water supply....................................................
75
125
Sewage disposal......................... .... ...................
75
Social and recreational •.....................................
50
15
All other Federal................................................
10
5
Miscellaneous non-Federal................................
15
20
First 5 postwar years
Second Third Fourth Fifth
2,855- 3,245
1,200 1,400
145
175
580
690
400
450
70
80
100
150
0
0
10
10
75
50
75
80
325
350
140
160
200
225
75
75
15
15
25
25
3,445
1,500
190
725
450
90
175
0
10
40
80
400
170
225
75
15
25
3,470
1,500
190
750
450
90
200
0
10
40
80
400
170
225
75
15
25
Aver
age
3,028
1,300
159
625
400
75
140
0
10
61
75
350
150
200
70
14
24
i Converted to 1940 cost levels.
,
3 Between defeat of Germany and defeat Of Japan.
* Additions, alterations, modernization, and major repairs of the type for which building permits are
usually issued are included with new construction except where listed separately.
* Includes municipal and other publicly owned utilities except those constructed in conjunction with
reclamation, conservation, and development program.
* Includes culverts, bridges, grade separations and other related work.
* Includes buildings and nonbuilding construction.
The value of work to be started as shown in table 1 was converted
into man-hours requirements. After conversion, the detailed classi
fication of projects used in table 1 was condensed into the 10 major
categories shown in table 2. The estimated man-hours requirements
were derived from the value figures by the use of data on the value of
work put in place per man-hour, under 1940 conditions, for each
major type of construction. These data were developed by the
Bureau in its program of analyzing the labor and material consump
tion in the major types of construction projects.
T able 2.— Site M an-H ours Required fo r Execution o f Predicted Construction Started
W ithin Each Year,
1 under
1940 Conditions
Site employment (in millions of man-hours)
Type of work and source of funds
Final war
year
First 5 postwar years
First
Second
Third
Fourth
Fifth
Total new construction...................... .......
Private __________________________
Residential building
Nonresidential building ..
Farm
r
_
__
utility ____ - _____________
1,548
1,106
475
301
98
232
2,862
2,123
1,080
596
128
319
3,964
2,970
1,485
944
158
383
4,303
3,172
1,615
996
165
396
4,356
3,154
1,625
988
165
376
4,362
3,152
1,670
940
150
392
Publie
Residential building
Nonresidential building
Highway, read and street 2
Civil aviation * .
_
____
Bewer and water
^__- - - All other public*
_________
442
3
134
150
0
45
110
739
32
129
338
18
71
151
994
49
198
450
23
103
171
1,131
59
235
525
24
117
171
1,202
64
246
563
24
120
185
1,210
64
254
563
24
120
185
* Man-hours required for execution of work started within each of the years shown, before adjustment for
carry-over of work from year to year.
* Includes culverts, bridges, grade separation and other related work.
* Includes structures.
50
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
An indication of the individual characteristics of specific types of
construction may be obtained from comparison of the figures for
farm construction in tables 1 and 2. Man-hours are somewhat low
in proportion to the value of work to be started, despite low wage
rates for rural workers and extensive use of lower-priced materials.
The reason is that commonly a considerable part of the work is done
by the farmers, family members, and farm employees, who help the
workmen hired to perform the more skilled operations. It is only
the work of this last group, and that of construction laborers hired
as such, which can be regarded as construction employment.
Tim ing o f Em ploym ent
The man-hours shown in table 2 are those estimated as necessary
to construct the projects started within each of the several years.
These figures are not the same as man-hour employment during
those years. A certain part of the work started during any 12-month
period is completed during the following period. The proportion
thus cajyied over depends on the type of construction and the time
of yearat which the successive 12-month periods start.
If the volume of work started were* uniform from year to year,
no adjustment would be necessary, because the unfinished work at
the end of the period would be equal to the previous year's unfinished
work which was completed during the early part of the period. This
condition is not present, however; the estimated volume of con
struction increases rapidly until the third year following defeat of
Japan. During this period the rate at which projects are started
is increasing continuously, subject to seasonal variations, and the
amount of unfinished work at the end of any 12-month period exceeds
the amount carried over from the preceding period. Since actual
employment results from the execution rather than merely the start
of work, the man-hours of employment during each of the postwar
years must be adjusted for this lag. The adjusted employment figures,
showing employment in man-hours actually available in each year,
are presented in table 3.
T able 3.—M an-H ours o f Site Em ploym ent Available in Each Year1 D uring Execution
o f Predicted Program , under 1940 Conditions
Type of work and source of funds
Site employment (in millions of man-hours) in
first 5 postwar years
First
Second
Third
Fourth
Fifth
Total new construction__________________________
2,644
3,762
4,249
4,352
4,363
Private..........................................................................
Residential building.......... ...................................
Nonresidentiai building........................................
Farm............................... ......................................
Utility...................... .............................................
1,915
959
523
123
310
2,791
1,404
857
153
377
3,130
1,589
983
164
394
3,156
1,623
990
165
378
8,155
1,661
952
152
390
Public...........................................................................
Residential building..............................................
Nonresidentiai building........................................
Highway, road and street K _________ ______
Civil aviation« .. ...................................................
Sewer and water.................. ..................................
All other public.....................................................
729
26
131
338
18
71
145
971
46
181
450
23
103
168
1,119
57
225
525
24
117
171
1,196
63
243
563
24
120
183
1,208
64
252
563
24
120
185
* Man-hours of employment provided during each of the years shown.
* Includes culverts, bridges, grade separations and related work.
* Includes structures.
PART 4.— SITE EM PLOYM ENT IN CONSTRUCTION
51
The amount of work to be performed, or of employment to be
available, during the first postwar year is estimated under 1940 con
ditions at somewhat over 2.6 billion man-hours, or about 60 percent
of the amount estimated for the fifth year. The greatest increment
in construction activity during the postwar period occurs between the
first and second years. As stability is approached, the rate of increase
falls sharply. From the third to the fourth years construction man
hours increase by only about 3 percent, and from the fourth to the
fifth years by less than 1 percent.
The distribution of construction over the first 5 postwar years for
individual types of work differs from the general pattern in some re
spects. The principal feature to be noted is a reduction in the fifth
year for man-hours in private nonresidential construction, the result
of an expected reduction in modernization and alteration of commer
cial and industrial buildings.
M a n -Y ea rs o f Em ploym ent Under 1940 Conditions
There is less concrete information regarding the hours worked
annually in construction than in most major fields of employment.
A full week ordinarily consists of 40 hours,3 and a year might be
regarded as consisting of 50 or 52 weeks. These figures omit consider
ation of the seasonal variation in the volume of construction work
with resulting high seasonal unemployment, and of the time lost
during the most active working season because of rain and other
interruptions. Hence conversion of man-hours to man-years on the
basis of 2,000 or 2,080 hours would give a theoretical figure for a year
of full employment, but would understate the number of workers to
be employed and overstate the average hours of paid employment.
The working season varies geographically with the climate and
local custom, and in many localities is affected by the type of work
being done. Some materials are damaged seriously by freezing,
which may occur several days after they have been placed and, hence,
whenever there is danger of freezing, can be used only under condi
tions permitting adequate protection without undue expense. Cer
tain operations are entirely feasible in unfavorable weather, but only
at greatly increased cost, and are therefore avoided whenever possible.
Some types of indoor work, such as “ roughing-in” of plumbing and
electrical installations, are comparatively unaffected by weather
but are nevertheless subject to seasonal reduction because of seasonal
variations in the structural work on which they are performed.
Although certain numbers of construction workers are employed
continuously throughout the year, the available data indicate that
these constitute a small proportion oi the total. For many workers,
especially the employees of the smaller special-trade contractors, it is
believed that employment is divided between construction work
proper and maintenance and repair work.
Hours worked per week are reduced by bad weather conditions,
especially by rain. Some kinds of work can be resumed as soon as the
rain stops, but others (such as outdoor painting) must be postponed
until the exposed surfaces have dried. In addition, there are inter
ruptions caused by variations in the work to be done, failure to ob
tain materials as needed, and miscellaneous causes. In these cases,*
* Shorter workweeks have been established in a few trades, in some cases nationally and in some cases
locally. The commonest of these is 35 hours.
52
PROBABLE VOLUME OF POSTWAR COKSTRUCTTOK
the workers involved are ordinarily laid off for a half day or whatever
brief time may be involved, without pay for this time lost. Custom
in this respeGt varies, particularly with current employment conditions,
but when the lay-offs are quite brief workers usually accept them
rather than undertake the trouble of moving their tools to another job.
In addition, workers lose time moving between jobs. The different
operations of an individual construction firm in most cases vary in
magnitude and its total activities extend over a considerable
area. Usually, a nucleus of “ regular” workers is retained and trans
ferred from project to project, and is supplemented by a relatively
large number hired on a project basis. These latter are hired for the
duration of their own work, and not of the project as a whole. In
extreme cases (such as extra laborers for placing concrete) they may
be hired for only a few hours, and then either rehired or replaced at a
later date when similar work is again to be performed. Hence it is
necessary for many construction workers to find new jobs at rather
frequent intervals, even during periods of above-normal activity.
Even when there is a scarcity of workers, this commonly means a
short period of lost time for some of those affected.
In view of these conditions, 1,400 hours has been assumed as
constituting a man-year of employment. This is equivalent to 40
weeks of 35 hours each. It is not regarded as an ideal work-year, but
rather as a fairly realistic figure in view of the seasonal and other
influences which have been effective to date.
An estimate of the full-time jobs to be filled, under 1940 conditions,
is presented in table 4. It indicates an ultimate working force of
about 3.1 million, almost attained in the third year and then fairly
constant for the remainder of the period. As is also apparent in
table 4, changes from year to year in the proportion of the workers
to be employed on the publicly financed projects are relatively slight.
This element of construction employment would of course be changed
drastically should policy decisions regarding the public-construction
program differ in major respects from those assumed in forecasting
the volume of work to be started. These jobs are full time, in the sense
T able 4.—M an-Years o f Site Em ploym ent Provided During Execution o f Predicted
Program , by Years, under 1940 Conditions
Site employment (in thousands of man-years of
1,400 man-hours) in specified postwar years
First
Second
Third
Fourth
Fifth
Total new construction................................................
1,887
2,686
3,035
3,108
3,117
P rivate-.......................................................................
Residential building...............................................
Nonresidential building........................................
Farm......................................................................
Utility....................................................................
1,367
685
373
88
221
1,993
1,003
612
109
269
2,236
1,135
702
117
282
2,254
1,159
707
118
270
2,254
1,186
680
109
279
Puolic...........................................................................
Residential building..............................................
Nonresidential building........................................
Highway, road and street *...................................
Civil aviation *.......................................................
Sewer and water....................................................
All other public......................................................
520
19
93
241
13
51
103
693
33
129
321
16
74
120
799
41
161
375
17
83
122
854
45
174
402
17
86
130
863
46
180
402
17
86
132
i Includes culverts, bridges, grade separations, and related work.
* Includes structures.
PART 4.— SITE EM PLOYM ENT IN CONSTRUCTION
53
that those who hold them are full-time members of the construction
labor force,4but not in the sense that all of these persons are employed
continuously throughout the year or even throughout the construc
tion season. The presence of so-called “ frictional” unemployment
between successive construction projects has already been mentioned.
This will affect some workers slightly or not at all, but others to a
considerable degree. At any given time, some part of the workers
shown will be temporarily out of work, having been laid off at one
project and not yet hired at another. This will of course be greatest
during the dull construction season, which in general is the winter
months. Adjustment for this situation has already been made by
the use of an average figure of 1,400 hours as a year’s employment.
Em ploym ent b y Occupation
Occupational specialization is an outstanding feature of the construc
tion industry. In part this is caused by the wide range of operations
to be performed and of materials to be processed, and to a considerable
degree it is the result of local customs, preferences, and other conditions.
Tins separation of functions is most extensive in the larger urban places
and in large projects, and is least pronounced in farm construction.
For rural work, the local carpenters ordinarily do lathing and not
infrequently install ready-made sheet-metal items and even electric
wiring, while the local masons often do plastering as well. When the
volume of work is sufficient to afford a living to workers in the lesscommon trades, the greater proficiency permitted by specialization
has caused its general adoption.
The occupational pattern differs greatly with the type of work. For
all types, laborers are the largest single group; for building construc
tion, carpenters are the largest single group of skilled workers. In
fire-resistive construction carpenters constitute one of the largest
occupational groups, even though wood is used only incidentally in
the basic structure, because they are needed for building the concrete
forms and for installing the interior woodwork and hardware. Even
in highway projects carpenters are quite commonly needed, to build
forms for bridges and culverts being constructed in conjunction with
the highway work, and for other related operations. Some occupa
tions— such as those of high-tension linemen, blacksmiths, machinists,
explosives workers (powder men)— are present on only a few types of
work or on unusually large projects.
Table 5 gives an estimate of the employment, by occupation, dur
ing the first 5 postwar years, according to the methods and patterns
of 1940. The more common occupations are shown, with a few com
binations of thoseyclosely related. The rather uncommon trades,
such as those mentioned above and a considerable number of other
occupations which are fairly widespread but individually small
(marble setters and helpers, elevator constructors and helpers, etc.),
are grouped together under the classifications, “ all other skilled,” and
“ all other semiskilled.” No attempt has been made to estimate
employment in the specialties within standard crafts (such as hardwood-floor laying, stair building, etc., under carpentry), the skills of
which are usually transferable to other operations.
<Persons following other gainful occupations during dull seasons are ignored in this statement.
54
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
T able 5.— Estimated Site Em ploym ent, by Occupation and Year, During Execution o f
Predicted Program , b y 1940 Pattern o f Operations and Productivity
Site employment (in thousands of workers) in
specified occupations in postwar years
First
Second
Third
Fourth
Fifth
1,887.0
2,686.0
3,035.0
3,108.0
3,117.0
23.0
139.0
16.0
32.5
197.0
23.0
36.5
222.0
26.0
37.5
227.0
27.0
37.5
229.0
27.0
Skilled workers __
Bricklayers, masons
Carpenters
_ _
__
E lectricians______________________________ __
Equipment operators
_ _
_ __ _
Lathers _
_____
_
Painters
Plasterers
Plnmhers
_
_ _
_ ___
Sheet-metal workers .....
_ ___
Steamfitters.................... ................. ....................
Structural, reenforcing, and ornamental iron-workers.
All other skilled workers
805.0
68.5
370.0
34.5
53.5
10.5
76.0
37.0
46.5
13.0
8.5
26.5
60.5
1,164.5
101.5
535.5
50.5
73.0
16.5
111.0
55.0
68.5
19.0
13.0
38.0
83.0
1,317.5
116.0
604.5
57.0
82.5
19.0
126.0
62.5
. 78.0
22.0
15.0
43.5
91.5
1,346.5
119.5
617.0
58.0
85.0
19.5
129.0
64.0
79.5
22.5
15.5
44.5
92.5
1,348.5
119.5
617.0
58 0
85.0
19.5
129.5
64.0
80.5
22.5
15.5
44.0
93.5
Semiskilled workers______________ _______________
Bricklayers’, plasterer’s helpers
Electricians’ helpers.
Plumbers’ helpers
______
Sheet-metal workers’ helpers _
_„ _ ___
Truck drivers_______________________________
All other semiskilled workers.
213.0
30.5
9.5
19.0
3.0
98.5
52.5
293.0
46.0
14.0
28.5
4.5
128.5
71.5
332.0
53.0
16.0
32.5
5.5
145.0
80.0
343.0
54.5
16.5
33.5
5.5
151.0
82.0
344.0
54.5
16.5
33.5
5.5
152.0
82.0
Unskilled workers.
Laborers.
_
_ _ _
Watchmen, miscellaneous
691.0
668.5
22.5
976.0
944.0
32.0
1,101.0
1,064.5
36.5
1,127.0
1,089.5
37.5
1,131.0
1,093.5
37.5
T otal-.. ,.r , _
Superintendents
Foremen
___ _
Clerks
_ _
_
_____
_
_ _
TTt_ _.
_
As is evident from table 5, skilled workers exclusive of foremen
constitute three-sevenths of the total for all construction work, with
only slight variation throughout the period. For private construc
tion they make up very nearly half, while for public construction
they are not greatly above a quarter of the total. This major differ
ence arises from the fact that the predominant part of the private
program will consist of buildings, which require the highest percentage
of skilled workers, whereas the public program consists mainly of
nonbuilding work and includes some large elements in which the
percentage of skilled workers required is notably low.
Among the skilled trades the carpenters constitute the largest
occupation, accounting for somewhat less than half of the skilled
group. Painters are the next commonest trade, and about 90 percent
of them will be employed on private work. Even for similar types
of construction, such as multifamily residential buildings, there is
proportionately more work for painters on the privately financed
jobs, because of more extensive decorative treatment. In contrast,
bricklayers will constitute about 8 percent of the skilled workers in
the private program, but 13 to 14 percent in the public program, be
cause the publicly financed buildings will be predominantly of masonry
and in many cases will have partitions of structural tile or other
materials installed by bricklayers. Equipment operators show an
even greater contrast, accounting for 6 percent of the employees in
the private program and 21 percent on public construction. This is
caused primarily by differences in the types of construction; those
types most extensively mechanized, of which grading and paving are
PART 4.— SITE EM PLOYM ENT IN CONSTRUCTION
55
the commonest examples, are undertaken almost exclusively by public
bodies. The semiskilled group is proportionately about 3 times as
numerous on public as on private work, because of the large number
of truck drivers employed in the nonbuilding types of construction.
In addition to the direct productive workers, an administrative and
supervisory staff of superintendents, foremen, and clerks will be
needed, making up somewhat less than 10 percent of total site em
ployment. This group will be slightly larger, proportionately, on the
publicly financed part of the total program, principally because of
differences in the relative importance of the various types of projects
and in the average size of projects. Roughly three-fourths of this
group will be foremen, for whom the distribution by craft will ap
proximate that for the workmen. Although most of the superin
tendents will be employed by general contractors and will have charge
of complete projects, superintendents for specific trades will be em
ployed on some of the larger projects. Clerks are employed only on
projects of moderate or large size, usually to be responsible for main
taining time, pay-roll, and material records, and other somewhat
similar work. In the largest projects a complete job office is estab
lished, having authority for many of the functions usually performed
at a contractor’s central office.
These estimates exclude employees of the contractors’ central offices
and job representatives of the owners, architects, and engineers.
Changes in Occupations and in Productivity
Changes in occupational patterns and in the work done by those in
‘ven occupations are taking place more or less continuously. In a
w cases, such developments have led to the establishment of entirely
new occupations on the initiation o^ new operations differing radically
from those of established trades. Other changes have either expanded
or curtailed the work of existing trades. Thus, metal lath is installed
by the lathers who do wood lathing; plumbing was greatly changed
through the replacement of lead pipe by steel pipe accompanied by
the change from boxed-in fixtures with exposed pipe to “ open”
plumbing with concealed pipe; plastering has been simplified by a
reat curtailment in elaborate ornamental work; and carpentry has
een changed in pattern by progressive reduction, over almost two
generations, in the use of ornamental woodwork and complicated
framing, accompanied by a great increase in the building of forms for
concrete work during recent years. Some of these changes have meant
that a lower level of skill is satisfactory for most work, but many have
merely called for changes in the pattern of skills needed in the occu
pation.
Rather distinct from the changes described above is another group
for which there is no exact starting date, but which has been accel
erated greatly by the war. This may be termed industrialization, as
applied to the construction of standardized structures or of structures
which lend themselves to standardization. This development has
been noted especially with respect to detached houses, which, however
much they may differ in exterior appearance and in the details of
ornamentation, when built in a fairly large promotional development
usually follow a very few basic designs in floor plan and structure
proper.
g
S
56
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
The wartime program of house construction has been marked by
much more careful planning, greater specialization of operations,
greater use of processing machinery at the site, and closer correlation
between the different parts of the work than had formerly been
practiced. Carpenters and workers in some other trades were pro
vided with detailed schedules and dimensions of pieces to be cut. In
a few of the largest projects, templates and other auxiliary devices
were used, eliminating even the necessity for measuring. After
cutting, the pieces were commonly delivered to the erection locations
in sets, often marked with code numbers indicating where they were
to be used.
This development (commonly known as pre-cutting) marks a basic
change, in that it transfers the scheduling of material processing from
a production function of foremen and skilled workmen to a manage
ment function. It affects employment both by increasing the pro
ductivity per worker and by reducing the range of skills necessary for
capable performance of important operations. After the war these
procedures will probably be used less intensively, because there will
be few if any repetitive projects comparable in size to the largest of
the wartime housing or barracks projects. At the same time, there is
every indication that greater mechanization and rationalization in
construction will be practiced than before the war.
Within recent years there has been notable improvement in some
types of construction machinery. The pre-cutting development above
mentioned was greatly facilitated by a comparatively recent type of
machine, the radial saw. Important development has also occurred
in some important types of highway machinery, primarily with
respect to increased capacity rather than to the type of oper
ations performed, but still increasing the productivity per worker.
Other developments have been of less individual importance, but in
combination have been appreciable. In addition, older equipment
items such as electric handsaws have been coming into increasing use,
and from time to time new uses are made of existing equipment.
Another progressive change has been in the almost continuous
increase in the extent of off-site processing. Present indications are
that this trend will continue and probably be accelerated. It affects
building construction more than other types, but extends to the
others to some degree.
These are all aspects of the general question of the postwar produc
tivity per worker as compared to that in 1940. It is certain that
there will be changes, but no exact measure of their extent is available.
The presence of changed methods and practices in recent construction
activities of numerous types has been noted, and estimates have been
made of their expected effect on the different types of work.
Table 6 presents the estimated employment by occupations after
the expected changes in productivity. It is recognized that the esti
mates for individual trades can be only rough approximations, but
they are believed to give at least an indication of the distribution of
the total changes. As is apparent from comparison with table 5, the
ultimate effect is expected to be a reduction of somewhat less than 9
percent in the number of workers required to carry out a year’s
program. This is expected to occur progressively over a period of
about 3 years, as the various developments progress and receive more
general adoption.
PART 4.— SITE EM PLOYM ENT IN CONSTRUCTION
57
The effects will differ among the various types of work, from a
maximum in highway and other paving and in private residential
building to a minimum (so small that no attempt at adjustment for
it has been made) in farm construction. Almost all occupations will
be affected to some extent, but with major differences between differ
ent types of work. Carpenters will be the group most affected in
private residential building, whereas in both residential and nonresidential modernization work carpentry methods are not likely to
change significantly. In the larger paving and grading projects the
number of construction machine operators will be reduced by the
larger capacity and greater productivity of the more important ma
chines, whereas in building work little net change in their scope of
work seems likely. It is probable that there will also be geographical
differences, with the changes in productivity greatest in those locali
ties where the adoption of improved methods has lagged heretofore.
T a b l e 6.— Estimated Site Em ploym ent During Execution o f Predicted Program , by
Expected Pattern o f Operations and Productivity
Site employment (in thousands of workers) in
specified postwar years
First
Second
Third
Fourth
Fifth
Total..............................................................................
1,840.0
2,513.0
2,773.0
% 837.0
2,842.0
Superintendents...........................................................
Foremen........................................................................
Clerks........................... ................................. ............
22.0
135.0
16.0
30.5
183.5
22.0
34.0
201.5
24.0
35.0
206.0
25.0
35.0
207.0
25.0
Skilled workers.............................................................
Bricklayers, masons...............................................
Carpenters........................... .................................
Electricians............................................................
Equipment operators.............................................
Lathers...................................................................
Painters..............*..................................................
Plasterers...............................................................
Plumbers..................... ..........................................
Sheet-metal workers..............................................
Steamfitters........................................................ .
Structural, reenforcing, and ornamental-iron workers.
All other skilled workers.......................................
789.0
67.0
360.0
34.0
53.5
10.5
74.0
36.0
47.0
13.0
8.5
26.0
59.5
1,090.0
95.0
501.5
47.0
68.0
15.5
103.5
51.5
63.5
17.5
12.5
36.0
78.5
1,203.5
107.0
550.0
52.0
75.5
17.0
113.5
57.5
71.0
19.5
14.0
40.0
86.5
1,229.0
110.0
562.0
53.0
77.5
18.0
116.0
59.0
72.0
20.0
14.5
41.0
86.0
1,229.0
110.0
560.0
53.0
78.0
18.0
116.5
58.5
72.5
20.0
14.5
41.0
87.0
Semi-skilled workers.....................................................
Bricklayers’ , plasterers’ helpers............................
Electricians’ helpers................. ........... .................
Plumbers’ helpers..................................................
Sheet-metal workers’ helpers-..............................
Truck drivers........................................ ...............
All other semiskilled workers................................
206.0
30.0
9.0
18.5
3.0
94.5
51.0
273.0
43.5
13.5
26.6
4.5
118.0
67.0
303.0
49.0
15.0
30.0
5.0
130.0
74.0
312.5
50.5
15.0
30.5
5.0
135.5
76.0
313.0
50.5
15.0
30.5
5.0
136.5
75.5
Unskilled workers...................... ..................... ..........
Laborers.................................................................
Watchmen, miscellaneous.....................................
672.0
650.0
22.0
914.0
883.5
30.5
1,007.0
973.5
33.5
1,029.5
995.5
34.0
1,033.0
998.5
34.5
The increase in productivity will probably be slightly greater in
private construction, because of the very large element of residential
building for which an increase of 15 percent is expected. Little
increase in productivity is expected for the small operators building a
house or two at a time or for the builders of luxury-grade houses.
For apartment construction the changes will also be well below those
for residential construction as a jwhole, largely because the procedures
applicable to frame houses are inappropriate. An increase of only 5
percent has been estimated for private nonresidential building. A
58
PROBABLE VOLUME OF POSTWAR CONSTRUCTION
large part of the private nonresidential building will consist of altera
tion and modernization work, most of it unsuited by its nature
to mass-production techniques. The new projects of a size sufficient
to afford opportunity for time savings through careful planning will
usually be performed by the contractors who have in the past been
the leaders in the planning and coordination of their operations.
Although some increase in productivitv in farm construction is
expected, it is likely to be quite small and has therefore been omitted
in the estimate. For utility construction an increase of only 5
percent has been assumed, because this also is a field in which work
has been carefully planned in the past and in which individual changes
affecting output are likely to be minor.
Increased productivity in public construction is expected to be
slightly less than that in private construction. Productivity in
public residential building is expected to increase by 10 percent, in
contrast to 15 percent in private residential building, because the
public work is likely to consist predominantly of apartment-type
buildings with masonry walls. At the same time, individual varia
tions between and within structures and the extent of ornamental
treatment will be much less in publicly than in privately financed
apartments. For nonresidential buildings an increase of 5 percent
has been estimated, the same as for privately financed buildings of the
same group. The greatest increase, 15 percent, has been estimated
for highway, road and street work, primarily because of recent
developments in some of the basic machines. The same amount of
increase has been assumed for airport work, the greater part of which
is quite similar to highway work. No change has been estimated
for sewer and water projects, already highly mechanized and stand
ardized in the principal operations, although it is recognized that
some small change is rather likely. For the “ all other public” classi
fication, consisting largely of heavy engineering work, an increase of 5
percent in productivity has been estimated. This work is usually
done by contractors who give the most careful attention to their
methods, and will be affected mainly by development of new
equipment.
S. GOVERNMENT PRINTING OFFICBi I M S
@FedFRASER