Construction Industry Forecast: Starts Up From $806.8B to Just $808B in 2019
The ongoing tug-of-war between business growth incentives such as tax cuts and risk factors like rising interest rates will keep the construction industry on a steady (if not exciting) course, at least for 2019. A cool down of the economy from the fastest growth rates in the past several quarters won't have a significant impact on the construction industry for at least another year, according to the November 2018 Construction Dive report "Calm Before the Storm? What the Construction Industry Can Expect in 2019".
The Construction Dive article cites statistics revealed by Dodge Data and Analytics Outlook Executive Conference last October. The industry-leading consulting firm sees even the modest increase in construction starts from 2018's $806.8 billion to $808 billion in 2019 as unsustainable, considering the second quarter of 2018 posted an elevated growth rate of 4.1% which was the fastest on record since 2014.
This metric along with other economic indicators are now at unsustainable levels. Moody Analytics senior director Cristian deRitis raised a serious red flag about the current low unemployment rate, warning that historically an unemployment number near 4.5% is a reliable precursor to a recession which inevitably follows about 3 years later.
Key advice for construction decision-makers from the Executive Conference is to plan on capturing the available opportunities in 2019 while planning for the recession storm looming in 2020 when the economy is expected to endure a serious slowdown by that summer.
No Relief From the Construction Professionals Shortage in Sight For 2019
An Associated General Contractors of America survey showed a disturbing 80% of the 2500 construction respondents are experiencing ongoing difficulty filling skilled craft positions and more than half of those companies (56%) have the same problem finding qualified construction professionals for salaried positions.
AGC economist Ken Simonson is quoted as advising a labor shortage panel that "this is a problem that companies will have to live with for a long time." Construction Dive author Kathleen Brown notes there is no silver bullet to fix the labor shortage problem.
A small minority of construction companies are hoping innovative construction practices and technology can help alleviate the manpower shortage by using labor-saving methods such as lean construction and engineering with BIM, building information modeling. For any construction company planning to seize the opportunities available in the 2019 industry while the bull market continues at a slower but steady pace, Resource Erectors provides the vital recruiting tools to locate the most qualified construction professionals they'll need to succeed.
A New Infrastructure Bill in 2019?
And just as the construction labor shortage shows no end in sight for the short term, the US Congress may increase the demand for construction talent with new legislation. According to the November 2018 news tracker report at ForConstructionPROS.com, Democrats in the new Congress are prepared to fund infrastructure spending with a 25% fuel tax; a tax which hasn't seen a rate increase since 1993.
Former Transportation Secretary Ray LaHood says the impetus for renewed infrastructure is building. The 25% tax would raise $394 billion for infrastructure spending over the next 10 years.
About Resource Erectors
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When you have new personnel requirements, Resource Erectors works directly with your company to develop the candidate screening process and evaluate the strengths of candidates best suited for your available positions. We follow through after hiring to ensure that employees are adapting to your company culture and on the right track to succeed in your organization. Over 80% of candidates placed by Resource Erectors five years ago are still contributing to the success of their companies today.
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