Digg This
Talk Back
Post a CommentRelated Articles
- Home builders can expect market to return to 2001 to 2005 levels
- Number Crunch: October 2008
- NHQ 2009: K. Hovnanian’s Virginia division has cultivated trades who love them
- NHQ 2009: K. Hovnanian – Northern California is all about Employee Satisfaction
- Online Communities Specifically Help Builder-to-Homeowner Communication
[View All]
|
||||||||||
HousingZone Most Popular Stories
- International Residential Codes Available Online
- Growing your remodeling business in the current economy
- 2008 Remodeler of the Year
- Develop Land Or Buy Lots? Home Builders Face Dilemma
- ProBuilder Product Report: Kitchen Appliances
- What Can You Recycle?
- A smaller home can still be beautiful
- Wood vs. Engineered Lumber
- Myths and Facts About Automatic Fire Sprinklers
- How to Use Percentage-of-Completion Accounting
Construction in 2007: Facing a Tough Year
For 2007, industry experts predict that total construction will decrease approximately 1 percent, buoyed only by the commercial and industrial sectors
By Dave Meyer, 2007 National Chairman
Associated Builders and Contractors
December 19, 2006
HousingZone
After years of near-record growth, the construction industry is faced with a slowdown. The U.S. housing market began a correction in 2006, and residential construction experienced a steady decline throughout the year. For 2007, industry experts predict that total construction will decrease approximately 1 percent, buoyed only by the commercial and industrial sectors.
Dave Meyer, 2007 National Chairman, Associated Builders and Contractors
Despite predictions of slowed growth, the construction industry needs skilled craft professionals more than ever. In 2006, workforce shortages became a harsh reality for much of the construction industry, and the crisis is only expected to worsen in the new year.
According to the U.S. Bureau of Labor Statistics, nearly 1 million new jobs will be created for employees in the skilled construction trades by 2014. The “Baby Boom” generation is preparing to retire, and the U.S. economy is expected to continue growing in 2007. When combined with the increased workforce demand in the Gulf Coast region, where clean-up from the devastating 2005 hurricane season is coming to a close and reconstruction has begun, the workforce crisis looks to be the most pressing issue facing the construction industry in 2007.
The ongoing challenge of rebuilding the Gulf Coast will have a far-reaching impact on other areas of the building industry as well. The sheer scale of the effort will likely have a direct affect on the price and availability of construction-related materials. In recent years, materials prices have been unstable, and shortages have persisted in some regions. Combined with steady demand from booming building industries in foreign countries, including China, potential price spikes and spot shortages pose a real threat to the U.S. construction industry in 2007.
Another major issue that impacted the construction industry in 2006 and that will remain a major issue in 2007 is the debate over comprehensive immigration reform. Last year, the U.S. Senate and the U.S. House of Representatives approved two very different bills that would tighten border security, crack down on undocumented workers and establish a much-needed guest worker program. In 2007, the industry must work with congressional officials to ensure that conferees negotiating compromise immigration reform legislation craft sensible measures that allow U.S. industries to meet their workforce needs while maintaining national security and continuing to grow the U.S. economy.
The rising cost of health care also poses a significant challenge for the construction industry in 2007. The vast majority of construction firms are small businesses that employ less than 20 people. The cost of health care coverage has increased rapidly in recent years, and many of these small businesses have been forced to increase their employees’ deductibles and co-payments. It is imperative that the construction industry continue to work with congressional leaders in 2007 to develop and implement effective solutions that provide America’s small construction firms with access to quality, affordable health care options.
While there are a number of tough challenges facing the building industry in 2007, there are some bright spots. The commercial sector showed strong growth in 2006, and industry experts predict that this growth will continue in the new year. New technologies continue to help builders bring projects in on-time and under-budget, and the nation’s economy continues to expand.
My association, Associated Builders and Contractors (ABC), will work with its industry partners, 79 chapters and more than 23,000 members to address the significant challenges that face the building industry in the year ahead. As one of the leading voices in the construction industry, ABC will strive to ensure that 2007 is a successful, prosperous year for contractors and craft professionals nationwide.
© 2008, Reed Business Information, a division of Reed Elsevier Inc. All Rights Reserved.