We have been talking a lot about how the US and global economies are shifting or have shifted into Phase C, Slowing Growth. Numerous parts of the global economy have already shifted into decline.
There is a part of the US, and other economies, that is still in Phase B, Accelerating Growth, and that is nonresidential construction. This is good news not just for contractors, but for many industries. Think of everything that goes into a building, bridge, stadium, or parking structure, to name a few types of nonresidential construction projects, and you can see the significance of this to the many industries that make or distribute all those goods.
Whether you are a contractor or a supplier, the following table presents a powerful list of opportunities for 2019 and into 2020 based on where these segments stand today.
|
|
12-Dec |
12MMT |
|
Office Building Construction |
7.0% B |
$63.0 bn record high and rising |
|
Private Lodging Construction |
11.2% B |
$31.7 bn and rising |
|
Private Education Construction |
3.7% B |
$21.0 bn and rising |
|
Private Higher Ed Construction |
4.4% B |
$12.9 bn and rising |
Contractors, please take note: Nonresidential construction employment is at a 10-year high of 823.4 thousand and moving higher, though at a decelerating pace. Job openings in construction (all types) are 28.4% above what they were this time last year. There are a record-high 254,000 openings!
Your hiring problems are going to get worse in 2019, and, to complete your projects on time and on budget (without excessive overtime), you will have to be creative in attracting talented labor. Your facilities, your website, and your attitude all must be geared to hiring today’s workforce.
The strong demand anticipated for 2019 should help distributors and materials suppliers maintain profit margins. The ascent in the different segments of nonresidential construction will give contractors the opportunity to bid or negotiate at elevated profit margins. Enjoy the ride!
Alan Beaulieu
President