Construction Jobs Blog

Headlines have continued to decry this historic correction in the first quarter of 2009.  But despite the foreboding coverage, green building has proved sustainable in more than one sense.  Firms and consumers are embracing the trend and proving that the economic downturn will not discourage the practice.

In fact, quite the opposite appears to be happening.  According to Turner Construction’s 2008 Green Building Barometer, 75% of commercial real estate executives said that credit market conditions would not stop them from constructing green buildings.  Citing reduced energy costs, higher building values and lower overall operating costs, the respondents suggest that the current economic doldrums will not take the wind out of green building’s sail. 

Green building is holding up in other ways as well.  According to the 2008 Green Survey:  Existing Buildings, more than 80% of commercial building owners Continue Reading »

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I was reading Forbes.com today and stumbled across a column that put a smile on my face.  While researching “the effects on the economy and job market from…greater green industry,” Michael Marks came to the same realization I did a short while ago:  “lo and behold, I found a topic that is nearly universally positive.”

With housing and financial turmoil, the increase in energy costs, and disasters dominating headlines for the past few months, it may be easy to overlook the progress of green industries and the promise they hold for America’s future.  And their promise is starting to be fulfilled:

– 2007 set solar energy records:  314 megawatts of new solar-generating capacity were constructed or installed in the U.S. last year, creating more than 6,000 new jobs and adding over $2 billion to the economy

– the number of jobs in “renewable energy or energy-efficient industries” is skyrocketing, with the American Solar Energy Society estimating it at about 8.5 million, and Marks predicting it could clear 40 million by 2030

The government is stepping in as well: Continue Reading »

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The Federal Open Market Committee announced today a quarter point cut in the federal funds rate, lowering it to 2 percent.  This is the seventh time since September that the Fed has slashed interest rates.

“Recent information indicates that economic activity remains weak,” said the Fed, citing “subdued” spending, “soften[ing]” labor markets, and continuing problems with housing.  In response to concerns about inflation, the Fed acknowledged the recent rise of “energy and other commodity prices,” along with some key indicators of inflation.  Still, the Fed predicts that inflation will be moderated later this year, but says it will continue monitoring inflation developments carefully.  This statement could be an indication that the Fed is done cutting interest rates, at least for the time being, in light of the risks of inflation.

The Fed’s announcement comes on the heels of the Commerce Department’s announcement that the U.S. economy grew at a rate of 0.6 percent in the first quarter.  While a weak performance, it still outpaced predictions.  Some analysts say the positive growth lends weight to the argument that we are not in an actual recession.  Others remain more skeptical, saying we might undergo a ‘recession’ without actually experiencing negative growth.  Either way, Stocks are up today on the back of this announcement and yet another interest rate cut.

Click to see:  Federal Open Market Committee Release; Commerce Department Release; Image via New York Times.

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Today, the National Association of Realtors (NAR) reported that sales of existing homes increased in February, offering a ray of hope to the besieged residential market.  NAR Chief Economist Lawrence Yun commented on the data, saying “the latest reading on home sales further confirms stabilizing trends.”

February saw existing home sales increase 2.9 percent and break the 5 million unit pace (seasonally adjusted annual rate).  While sales are still down significantly from first quarter 2007, Yun says “the relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers.”  In fact, about half of the U.S.’s metro areas witnessed price increases. 

While still high, total housing inventory was down 3 percent at 4.03 million existing homes for sale, a 9.6 month supply at the current sales pace.  January had a 10.2 month supply.  Yun called the decrease “very unusual,” and said it may indicate that the rush of speculative investors has tapered off, or that sellers are holding off listing.  Also, “according to Freddie Mac, Continue Reading »

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Fannie Mae and Freddie Mac got a boost from regulators today, who announced new regulations to help the housing market.  The Office of Federal Housing Enterprise Oversight (OFHEO) lowered the two agencies’ minimum capital surplus from 30 percent to 20 percent.  The 10 percent adjustment will pump $200 billion of much needed cash into the mortgage market.

The result will be lenders providing more money for loans, hopefully at lower interest rates.  Treasury Secretary Henry Paulson said, “additional capital will enable the companies to help more homeowners and will strengthen the underlying fundamentals of the mortgage market.” 

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It was a good day on Wall Street today, as stocks had their biggest rally in five years in the wake of a 3/4 point interest rate cut by the Fed.  The strong performance of Wall Street giants like Lehman Brothers Holdings Inc. and Goldman Sachs Group may help assuage some of the concern following in the wake of the Bear Stearns debacle.

But it wasn’t just the banks that benefitted.  According to Bloomberg, the New York Stock Exchange had its “broadest advance since September…16 stocks rose for every one that fell.”  The Nasdaq, Dow Jones industrial average, and S&P500 all surged as well.

The Fed cut the rate by three-quarters of a percentage point to 2.25 percent.  The benchmark rate is now the lowest it has been in more than three years.  “The central bank has cut the rate six times and slashed the discount rate for direct loans to banks eight times since the middle of August.”

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In 2007, convention center exhibit space increased by only 1 percent.  That is the smallest rate of growth since 1999.  But experts predict that last year’s slow growth was abnormal, and that the building boom in convention center exhibit space will regain its footing in 2008.

Forecasts project new exhibit space growth to hit about 3 percent this year.  According to Tradeshow Week, that is slightly below the 20 year average growth rate of 3.4 percent, but still represents “more than 7 million square feet of new space in the U.S. development pipeline.”

Since at least 2005, convention and exhibition growth has outpaced convention and exhibit space growth by roughly .3 percent annually.  In other words, demand for convention space has been outgrowing the supply of convention space for at least the past three years Continue Reading »

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Recent news coverage of home builders has been generally negative.  Reorganization, downsizing, and bankruptcies make headlines, and the debate over a possible recession wages on.  It is easy to see why most people think housing is a mess, and in many areas the market is challenging, to say the least.  But during market corrections it is easy to lose sight of the bigger picture.  The fact of the matter is that in the coming years, the U.S. home building market will provide rich opportunities for growth and expansion to companies on the upside of this downturn.

In talking to recently-named President of U.S. Operations for Mattamy Homes, Steve Parker, I found a breath of fresh air from the gloom and doom of mainstream news.  And I believe that what he said is important because it accurately represents the position of a large number of smaller home builders across the nation, who reporters have passed over in decrying this historic correction.

Some smaller home builders like Mattamy are finding themselves better suited to survive the slowdown than a number of the larger, public builders. Continue Reading »

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Looking for a career change and don’t mind relocating?  Maybe you want to move.  Forbes.com came up with this list of the Top Ten Best Cities For Jobs in 2008.

The rankings for the forecast were determined by equally weighing (1) the state’s unemployment rate, (2) job growth, (3) income growth, (4) median household income, and (5) cost of living for full-year 2006 (only partial data is available so far for 2007).  The data was provided by Moody’s Economy.com, and is from the 100 largest metropolitan areas in the U.S.

“Mark Zandi, chief economist and co-founder of Moody’s Economy.com, acknowledged the housing market depression the company is facing and said the destinations that prevail on this list weren’t as heavily vested in the real estate development boom, which ultimately led to a historic bust.”

1. Salt Lake City, Utah Continue Reading »

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On Friday, two reports were released showing that nonresidential construction sectors continue to grow, despite the drastic correction in residential construction.  The numbers for 2007 indicate that it was a rather good year for nonresidential building.

The U.S. Census Bureau of the Department of Commerce released the first report on December 2007 Construction Spending.  Nonresidential construction was at a seasonally adjusted annual rate of $380.4 billion in December, 1.3 percent above the revised November estimate of $375.6 billion.  Not only did private nonresidential construction grow in December, but it also grew significantly during the entire year.  The value of private, nonresidential construction in 2007 was $349.8 billion, 18.3 percent above the $295.7 billion in 2006.

As you can see on the graph, private, nonresidential construction grew steadily throughout 2007 Continue Reading »

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