Gravel2Gavel Construction & Real Estate Law Blog
On February 21, 2012, the AGC announced that construction employment remains below peak levels in 329 out of 337 metro areas.
Not surprising, the hardest hit metro areas all took great advantage of the housing boom until the economic recession wiped out the demand – Phoenix-Mesa-Glendale, AZ, Lake Havasu City-Kingman, AZ, Riverside-San Bernardino-Ontario, CA, Las Vegas-Paradise, NV, and Chicago-Joliet-Naperville, IL experienced the greatest declines in construction employment as compared to peak levels. Although it appears that the housing industry is finally on the rebound, there are so many available homes and condominiums in these areas that a return to heavy residential construction is still years away.
The only six metro areas that have exceeded peak levels have connections to the energy sector – Bismarck, ND; Lawton, OK; Houma-Bayou Cane-Thibodaux, LA; Longview, TX; Waco, TX; and El Paso, TX have all experienced a rise in construction employment. Will the energy sector contribute to the trend of Americans moving South and away from parts of the Northeast and Midwest? If so, construction will continue to increase in these southern metro areas. Additionally, it would seem that the growing natural gas industry will increase construction in areas with large reserves. Texas and the states around the Gulf of Mexico have large natural gas reserves, but there is now also an increase in shale production in states including New York, Pennsylvania, Arkansas, Oklahoma, Texas and Louisiana. It will be interesting to see whether these new energy sector areas might also attract new construction.
Not relying on the energy sector to save the construction industry, the AGC continues to urge Congress to pass delayed infrastructure measures, which includes legislation to fund highway, transit and aviation construction work. As part of an effort called “Make Transportation Job #1,” the AGC is teaming together with the U.S. Chamber of Commerce and other groups to convince Congress to pass a fully-funded surface transportation bill before funding expires on March 31, 2012. As part of this effort, the AGC is encouraging everyone to contact his/her U.S. Representative and Senators to encourage Congress to pass legislation that invests in our roads, bridges and public transportation systems.
As noted in the ASCE’s economic report on surface transportation released last July, America’s deteriorating infrastructure will cost the American economy more than 876,000 jobs and suppress the growth of the country’s GDP by $897 billion by 2020. Not only is construction necessary to fix our country’s infrastructure, it also appears necessary to save our economy.
AGC CEO Stephen E. Sandherr is very frustrated with the government’s inability to approve shovel-ready projects: “What makes these job losses even more frustrating is the fact that many of them could have been avoided. Thousands more construction workers could be employed today if Congress wasn’t years late in passing measures like the highway and transit bill.” Mr. Sandherr continues to encourage public officials to consider the measures outlined by the AGC in its construction industry recovery plan, “Building a Stronger Future,” which is designed to increase private sector demand.
The full AGC press release can be found here, which includes the construction employment figures by state and by rank.
Will these numbers encourage the construction industry to take different approaches, like the Public-Private Partnerships discussed in previous entries?