Top Economists See Spotty Construction Growth

[mark handler]

Three top economists concur that despite last year’s gains the overall market is uneven. While all three see growth ahead, Ken Simonson, Kermit Baker and Alex Carrick, the chief economists at the Associated General Contractors of America, the American Institute of Architects and CMD Group, respectively, warn that the overall market is a bit "spotty." The economy has been slowing down and isn’t growing as quickly as expected, said Alex Carrick during a construction outlook webinar hosted by CMD. For instance, the number of civil engineering projects in 2104 was up more than 9% from a year earlier, according to Carrick, but he sees that increase declining to 4.2% this year and averaging between just 2.2% and 3.3% over the next several years. Because there is still no agreement on the transportation bill that expires the end of July, Simonson sees no growth this year or possibly a 5% decline along with cancellation of contracts already issued. Simonson forecasts that spending on health care facilities will remain steady or could decline 5% this year, although Carrick believes that aging baby boomers and an increasing interest in wellness could lay the groundwork for a double-digit spending increase. The availability of construction workers is also an increasing concern. Baker said the industry needs to attract more immigrants and younger workers and make the industry more attractive to women in order to significantly grow the workforce. Simonson notes three trends that are holding back the need for building: Government is spending less on schools and infrastructure, consumers are switching from stores to online buying and employers are shrinking office space per employee. Despite all that, all three economists see the industry growing. The increase in construction activity at tidewater ports in preparation for the large Panamax ships expected once the Panama Canal expansion is complete assures continuing work. The trend of the young and old migrating to cities so they can live near work and play will mean ongoing construction of mixed-use projects of all types.

 

[mtlogcabin]

the industry needs to attract more immigrants and younger workers and make the industry more attractive to women in order to significantly grow the workforce.

End or significantly reduce the welfare benefits to the able bodied should grow the work force with Americans instead of immigrants.

To many young people are using EBT cards at the mini-markets for non-essential items such power drinks and snacks then spening cash for beer and cigarettes. The ones I see on a regular basis seem to have a new or expanded tattoo every other week.