The Economy and Its Relation to the Industry
Construction attracts billions of dollars of investment each year and has an immense impact on the US economy. Government stimulus packages have helped fund many public construction projects in recent years. The US economy has recovered much ground since the great recession, but it’s been a tough slog.
Around 70% of construction projects are publicly funded works to improve the nation’s infrastructure. Many of these are civil engineering projects, such as roads, bridges, carparks, and dams. They improve the transport system for the benefit of everyone.
Better highways mean the commute becomes easier, and worker productivity increases. New schools and hospitals offer the populace better health and education facilities.
The remaining slice of the construction pie is privately funded. Much of this investment goes towards building residential and commercial properties. It is the construction industry that is usually the best bellwether of the state of the economy. Key economic indicators are closely linked to construction and its related industries.
Unemployment is one such key indicator. When construction expands, unemployment falls, and not only among the skilled building trades. There are many occupations related to construction that also benefit. As the demand for building materials, tools, and machinery hots up, wholesalers take on more employees. Architects, civil engineers, realtors, and building inspectors, soon find themselves busier than ever.
But the construction industry doesn’t only get more people back into work. There are other, subsidiary, benefits from laying more bricks. The construction industry stimulus helps the Fed keep a lid on low interest rates. This combined with more residential dwellings means home ownership becomes more affordable. In fact, construction often reins in galloping house prices.
The 2007- 2009 recession stung more than a few first-time homebuyers. Trust is only now seeping back into the property market. With wages stagnant, credit tight, and bigger down payments, there’s still some way to go.
Still, more and more young people can afford to take out mortgages. With increased home ownership comes the buzz of consumer confidence.
Those new homes need to be filled with TVs, domestic appliances, and furniture. Here’s where the construction industry gives the nation’s economy wheel another big spin. Almost every retailer who sells something that can furnish or be stored in a house, gets a boost in profits from rising home ownership.
The construction industry provides a solid foundation for the nation’s economy and offers far more than a few more construction jobs. Ultimately, expanding construction helps many other industries increase their bottom line.