The economic outlook for the construction
sector is looking optimistic. In 2012, total construction spending is expected
to grow by 3 to 9 percent. And the future looks even brighter; total
construction is expected to go up by 6 to 10 percent per year in 2013-2017.
On
September 6, Ken Simonson, Chief Economist of the Associated General
Contractors, gave a presentation on the economic outlook for construction at an
event hosted by the National Economist Club.
What explains the rosy scenario for the
construction sector? Simonson said that office, retail, and lodging
constructions are up due to remodeling. In addition, the production of shale
gas (67 percent increase in 2007-10), and the expansion of the Panama Canal are
driving new activity. Shale gas has both direct and indirect impacts on
construction. For example, the direct impacts include the construction of
access road, site preparation, storage pond, support structures, and pipes for
each well. The indirect impacts include local spending by drilling firms,
workers, royalty holders, among others.
How does the expansion of the Panama Canal affects
construction in the United States? The expansion of the Panama Canal will
require an upgrade of the ports in the United States to accommodate larger
ships. The upgrade of ports includes investing
in dredging, piers, cranes, and access road. The upgrade will also lead to
possible bridge, tunnel, and highway improvements, resulting in possible
changes in inland distribution and manufacturing. Overall, private
nonresidential and residential spending are leading the way forward for the
construction sector.
Looking to buy a house or rent an apartment?
According to Simonson, apartments and multi-family housing should boom. On
the other hand, single family housing is growing, but with an uncertain future.
He noted that the apartment vacancy rate is now at a 10-year low and rents are
high.
Looking for a job in the construction
sector? “Construction added 0 jobs in 2 years, but unemployment is down,”
said Simonson. Basically, workers are leaving for other sectors, going back to school,
and retiring. Simonson presented a chart that showed the change in construction
employment by state in the United States. The map was half or less in green,
meaning jobs available, and half or more in red.