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Stimulus Money, Green Building: Reasons for Optimism In 2010
by Bob Miodonski
January 1, 2010

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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.


Bob Miodonski
miodonskib@bnpmedia.com
Bob Miodonski is the grouppublisher of the Plumbing Division of BNP Media. He can be reached at 847/405-4007, miodonskib@bnpmedia.com.

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  Comments (1)Post a Comment
Title: green incentive funding


What can the government green incentive funding really be used for? Can it be used for rainwater havesting coupled with rainwater reuse say for irrigation, or improving storm watwer quality?


 

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