The “Great Recession” theoretically lasted about 18 months from 2007 to 2009. Recovery has been painful in many industries, but now in 2015, the construction industry is avoiding the effects of the recession more rapidly.
How the recession is affecting the commercial construction industry
How bad was it?
The construction industry is cyclical and the recession usually enters a period of boom, but the harsh and widespread recession could not be prepared.
Homes: Homeowners default homes, others delay buying homes, leading to an excess of residential real estate suffering from realtor inventory.
Commerce: Commercial construction was also hit hard, heavily impacted by federal budget quarantine and a final but temporary closure, reducing government spending and significantly reducing lending practices Industria de la CONSTRUCCION.
Institutional: Institutional construction remained stagnant and was affected by the same restrictions and financing issues faced by the commercial construction sector.
How have construction workers been affected?
Nevada, California, Florida, and Arizona are usually busy areas of construction. But the recession changed that:
Nevada employed an estimated 146,000 construction workers at the peak of the construction boom. That number has decreased by 59%.
Construction employment in Arizona has fallen by 50% from its pre-recession industry peak.
Florida has lost 40 percent of its construction workforce as it approaches industrial unemployment in Nevada and Arizona.
California performed well, but still recorded a 28% decline.
According to the US Bureau of Labor Statistics (BLS), about 2.3 million construction workers lost their jobs in the recession (about 30% of total unemployed jobs).
The construction industry as a whole has an estimated 1.4 million fewer construction workers in 2015 than in 2007.
Construction outlook after 2015
Fortunately, the United States and its construction industry remain away from the most severe effects of the Great Recession. Industry observers expect the following improvements to be seen:
Non-residential construction: In particular, real GDP growth is expected to be 2.6% in 2015, and it is performing steadily. This sector could grow by 8% as office buildings, hotels and industrial facilities grow.
Single-family homes: With easier access to mortgages, the number of housing units is expected to increase by 11%.
Manufacturing plant construction: Probably a decrease of about 16% after a significant increase in 2013 and 2014.
Construction for institutional investors: A gradual upward trend will continue, expected to increase by 9% from 2014 results.
Home Construction: Rising interest rates have called it a potential “wildcard” for 2015. Existing home sales could rise towards 10%.
Public Construction: Growth remains low as federal spending constraints continue. However, transportation costs are expected to increase by about 2.2%.
Ironically, construction workers may not be in a hurry to get back to their new job. Many have left the industry altogether and retrained for other jobs.
Both Texas and North Dakota have seen significant increases in construction employment. North Dakota now needs to recruit construction workers. Construction employment in Texas has increased by 10%, approaching its pre-recession peak.
Economists do not expect the construction industry to return to peak levels (2006) until 2022 and beyond. However, BLS predicts that the fastest growing jobs today and in 2022 will be in healthcare and construction.