Politics and Its Relation to the Industry

With its robust contribution to GDP, the construction industry will always be nurtured by political circles. Since the Great Crash, the US economy has struggled to regain its momentum. Federal stimulus has had only a modest effect. Many politicians continue to place faith in the construction industry as the economy’s salvation.

To achieve decent employment and sustained economic growth, the USA needs to be looking at GDP growth of at least 3% a year. Previous attempts to create a healthy economy based on real estate and consumer spending failed.

Instead, the new idea in Washington these days is to build up the nation’s energy infrastructure. Energy policy, it’s hoped, will be the new driver of the US economy.

 

Energy Projects

For too long, many say, the USA has been dependent on foreign supplies of petrochemicals. Despite owning one of the largest reserves of oil and natural gas in the world, the USA is a net importer of both oil and LNG (liquefied natural gas). Failing competitiveness has eroded the nation’s energy infrastructure over the years.

The drive toward more energy projects, such as the Dakota pipeline, is good news for the construction industry. The ultimate goal is energy independence, with US oil and gas production exceeding domestic consumption.

The growth sector here is a move towards sustainable energy sources. Though these projects are smaller scale and less attractive to larger companies, they are plentiful and necessary.

 

Transportation Policy

Increasing amounts of oil today are transported by road and rail networks. Transportation has always been a politically sensitive issue. Many a politician’s career has been kick-started by the promise of a new highway. People want to feel they can travel freely about the country, and easy transport of goods helps keep consumer prices down. Reduction of gridlock and easier commutes keep workers happier and more productive.

Whenever transport infrastructure expands, the construction industry gains profitable new government contracts.

 

Residential Construction

Energy and transportation policies are drawn up under national governance. Residential construction, by contrast, is influenced more by local state politics. Some states are more resistant to property development than others.

Usually, the big construction companies build new homes in places where zoning and permitting laws are more relaxed. This is often true in the heart of the country, away from the West and East Coast urban conglomerations, and in rural areas that are depopulating.

So, the location of new residential developments usually depends on who gets elected to local government. Often it comes down to a politician’s personality, money, and mandate. For this reason, construction companies make no secret of following local politics very closely indeed.

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