HOME SALES GENERATE JOBS

taken from the Clayton Research Report  –

AN AVERAGE OF 202,750 DIRECT AND INDIRECT JOBS GENERATED ANNUALLY BY HOME SALES AND PURCHASES THROUGH MLS® Expenditures on activities such as purchasing a home result in three distinct rounds of impacts on the economy (see Figure 3): · Direct impacts – economic activity in the industries supplying products and services to homebuyers. Examples include the jobs generated in the appliance, construction and real estate sectors involved in producing and providing the specific goods and services required by purchasers. · Indirect impacts – economic activity in industries providing goods and services to the industries involved in the direct round.

 Examples include the raw materials and components used in producing appliances purchased by homebuyers; the wood and other industries involved in providing inputs to the manufacture of building products used in home renovations; and the computers and other goods used by financial and real estate service firms involved in the sale of financing for the home. The chain reaction spreads across the economy and provides employment in a wide range of industries that supply those directly involved in providing goods and services to the home buyer. · Spin-off impacts – the so-called Keynesian multiplier effect resulting from the expenditure of incomes generated in the first two rounds.

The wages, salaries and other income that accrue to households as a result of the direct and indirect rounds will, in turn, generate economic activity as these households spend their incomes in the general economy.

The relationship between these spin-off impacts and the initial expenditure resulting from the purchase of a home is less clear than for the direct and indirect rounds – much household spending would occur regardless of whether it is financed by wages and salaries, or through unemployment insurance, other government transfers or savings if the direct and indirect employment did not occuR. Economic Impacts of MLS® Home Sales and Purchases in Canada and the Provinces 2006-2008 Page9 April 24, 2009

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