Increases in Construction and Development – Is it here to Stay?

Despite the level of uncertainty there has been with the presidential election, recession, & financial turmoil overseas there is a high level of optimism in the areas of highway projects, residential and non-residential projects, and the employment opportunities that come with these.

If you have gone on a road trip of any kind lately you are well aware of the highway and bridge construction that is going on.  Is this a sign of the construction to come? Some of the construction that you see is here to stay and some of it is not. The answer may depend on the location.  Each state received different amounts of stimulus from the federal government and have spent that money in different ways.  Additionally, there are billions of unspent money waiting on larger projects.

In 2013, a new highway bill brought a new commitment to renovating our highway infrastructure.  There should be an uptick due in-part for demand for repairs and new construction projects.

Building Construction

What level of growth can we expect in new construction for both residential and commercial buildings?

In 2013 total housing construction is expected to increase by 20% over last years levels.  Despite the growth, credit will continue to be a hindrance to a full housing recovery.

You can expect lenders to be tight for both builders and buyers.  Many small lenders are still under federal regulations that make it harder to build a house and easier to buy a house that is already on the market.

You can expect residential construction real dollar spending to increase 6.6% is 2013.  This area is starting to see some demand due to some demographic factors.

With the rise in residential construction, you can expect a decline in commercial construction.  Commercial construction is expected to decline 2.1% in 2013.  This area is slowed by the political uncertainty that is lead to business owners not wanting to take certain risks.

Unemployment Concerns

Is unemployment in the construction industry expected to decrease in 2013?

You should expect employment in the construction industry to pick up due to the increase in residential construction.  It is estimated that 1.5 construction jobs are created for every new house that is built.

Construction jobs are not the only industry that gains jobs when production picks up.  Cabinet makers, appliances manufactures, carpet manufactures, and other suppliers generate new jobs during an increase in housing production.

Studies show that in 2013 there will be an estimated 140,000 new single-family homes over the 2012 final total.  This will create 210,00 new construction jobs and 400,000 new jobs for suppliers.