Construction industry will see gains next year despite election results
At the ASPE trade show last month in Charlotte, N.C., I ran into a former national president who told me that design projects have been picking up recently at his firm. He expects 2013 to be a strong year.
Our conversation took place eight days before the presidential election. When I asked him what impact the outcome of the election would have on his business, he replied, “Absolutely none.”
His comments are in line with those of an economist I heard speak at another meeting earlier in the month. They also agree with a report issued the week before the ASPE show by construction industry consultant FMI.
“We believe this election will give a positive boost to the overall pace of recovery, no matter who wins which office,” FMI President and CEO Hank M. Harris Jr. states.
If nothing else, he adds, the election will resolve the uncertainty that business leaders frequently cite as their No. 1 complaint. Other factors untied to election results include the pent-up demand in many construction sectors and the estimated $2 trillion in cash balances possessed by corporate America.
“Perhaps most significantly, U.S. businesspeople are simply tired of the downturn,” Harris writes. “Our sense is that, at least in our industry, people are tired of playing defense and are ready to play offense.”
Economist Brian Beaulieu, who follows the construction industry closely, agrees that whoever wins the presidential election won’t make a major impact on your business.
“The future is a function of what we want to be; it does not depend on government,” he told contractors at a meeting in Las Vegas. “Stop worrying about the election and be optimistic about the future.
“Use your imagination to dream of changes and doing new things. Does that still excite you? Do you still have the physical energy to make it happen – to work that hard and that smart? If you still have the imagination and energy, stop looking at 2008 and ’09 and worrying if it will happen again and look forward.”
Fortunately, you can afford to be optimistic with signs of an improving economy and construction industry. Beaulieu pointed to the fact that U.S. dependence on foreign oil has declined while American workers are seeing gains in productivity and employment.
“The unemployment rate of 7.8% are real numbers and not spin,” he said. “But focus on employment – it’s up. It would be growing faster if we could find the right people to hire and people were coming to us with the right skill sets. The job opening rate is soaring.”
In the construction industry, both housing starts and existing home sales have increased since last year. Beaulieu expects those trends to continue through next year, although the residential market may experience softness in 2014.
The nonresidential construction market, on the other hand, will be strong in 2014 as it will next year.
Similar to the election results, Beaulieu isn’t concerned about the so-called fiscal cliff caused by the federal tax and spending changes due early next year. People worried about the country going over the fiscal cliff are paying more attention to political spin than they are to economic reality, he said.
“The economy will continue to move higher,” he said. “You and I should remain aggressive in our plans and our spending.”