Stimulus Money, Green Building: Reasons for Optimism In 2010
by Bob Miodonski
January 1, 2010
Economists tell us the recession ended a few months
ago. The reason you may have missed it is because so many people still are
looking for work. While the housing market has been showing signs of life
lately, tight credit and high unemployment continue to hamstring nonresidential
construction markets.
One economist, Sergio Rebelo of Northwestern University, recently spoke at a
luncheon I attended. If you’re looking for reasons to believe 2010 will be
better than what we experienced in 2009, he pointed out that a quick economic
recovery followed every post-World War II recession since
1948-49.
The two previous recessions, in 1991-92 and 2001, ended in “jobless
recoveries.” That means unemployment rates continued to go up even after growth
resumed.
He also cited reasons why the current recovery may not be as fast as earlier
ones. And, he did say that commercial construction markets will have a longer
climb back than residential. His assessment agrees with what
plumbing-and-heating manufacturers have been telling me: They expect 2010 to
start out slowly on the commercial side of the business and hope to see orders
pick up in the second half.
For the economy as a whole, however, Rebelo did give another reason for
optimism. Only about 20% of $787 billion in federal economic stimulus money was
spent in 2009.
That means 80% has yet to be spent. The government will distribute almost 50%
of the $787 billion in 2010.
The government has allocated $30 billion of the money for green construction.
About 80% of those funds will be spent in 2010 and 2011.
The Greenbuild show in November in Phoenix provided more reasons to be
optimistic. In a down market, the product expo and conference sponsored by the
U.S. Green Building Council continues to be one of the most upbeat construction
industry events.
I attended a press conference there that tied green construction to job growth.
Among the findings in research done by Booz Allen Hamilton is that green
construction supported more than 2.4 million jobs between 2000 and 2008. During
the same period, green buildings provided $123 billion in labor earnings and
generated $173 billion in gross domestic product.
The study’s positive outlook for 2009-2013 shows green construction generating
an additional $554 billion in GDP while providing $396 billion in labor
earnings.
“By the year 2013, this study estimates that green buildings will support
nearly 8 million jobs,” the report states.
About the only downside to these increasing numbers can be found in the
relatively small space green buildings occupy in the overall construction market.
Excitement about sustainable buildings will contribute, however, to the overall
economic recovery.
The start of a new year always provides a jolt of optimism. For 2010, we can
see a foundation for that optimism – as cautious as it may appear now.
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By: George B. Swietczak
Posted: February 25, 2010 2:29 PM