Morris R. Beschloss 2014-08-28 06:35:47
Major Breakout Expected for Commercial Building Growth will spur employment in construction industry. Unemployment in the construction industry is sure to change for the better with the 2007-2010 financial crisis well behind us. One only has to look at the nation’s various regions to see the embryonic construction activities that will evolve into jobs for tens of thousands of construction workers previously left unemployed by the housing crash. While the current housing comeback comprises a plethora of multistory apartment buildings for long-term leasing or monthly rental, it will put thousands of experienced workers into the employment pool, since this latest surge of construction will require more numerous and seasoned workers than were previously needed for single-home building. When it comes to commercial and industrial construction, it is more likely that employment shortages will manifest themselves, as indicated by the latest potential growth that will evolve in most U.S. regions, in the years ahead. It has been well-established that the revolutionary hydraulic fracturing, or fracking, breakthrough has not even reached its 10 percent growth potential. As it accelerates, the residential and commercial activity accompanying the heavy industrial fracking activities, such as housing, health-care facilities, offices and retail establishments, will have to spring up to support the basic industrial activities that fracking incurs. A good example is North Dakota’s Bakken Belt, which already has attracted new educational institutions (colleges and training schools), as well as housing contractors and services, while almost half the well-paid fracking personnel are living in temporary shelters such as mobile homes. The latest unemployment rate in that once-agricultural state is 3.2 percent with $75 billion of revenues to be generated within the next 15 years. A recent study by the University of Southern California estimates the nation’s biggest fossil fuel repository, California’s Monterey Shale, is far larger than the Bakken Belt and eventually will employ thousands of construction and complementary service workers once it gets into high gear. It will also return the Golden State back into the black, easily covering current deficits. A record number of commercial and industrial projects already are underway and will be completed if the federal government gets out of the way. These have been either mothballed or left on the drawing board while the fiscal recession wended its way through its destructive downturns. The recession has left in its wake broken bridges, unrepaired dams, unfinished electric utilities and a slew of highways that have not seen updating since being built into a vast network for military purposes during the cold war in the 1950s. All this spells an insatiable need for residential, commercial and infrastructure construction activities that will create the first stage of a building boom, the likes of which the United States has never seen. This is required not only by a desperate need to update, repair, maintain and modernize, but it is also required by a population that has doubled since the Eisenhower years, when the last massive national infrastructural program was implemented. Such a monumental and unprecedented national program is particularly timely and possible because of the trillions of dollars of squirreled- away funds that are ready, willing and able to be used to make this mammoth national approach feasible. Optimistic Outlook A number of positive factors are combining to lend credence to the development of an outstanding economic rebound. This follows the lackluster multiyear comeback that inched out of the great fiscal recession (2008-2010). Even academic economists, generally hesitant in their forecasts, are seeing brighter prospects ahead; they actually are upping their previous growth projections. According to the median estimate of 70 economists in a mid-January survey, the participants upped total 2014 growth from a previous 2. 6 percent to 2.8 percent, which is still below the overall 3 percent plus that this column calls for. Some early indicators supporting this author’s more-optimistic contentions are as follows: 1. A number of regional reports indicate that manufacturing is picking up. The Federal Reserve Bank of New York’s general economic index recently jumped to 12.5 from 2.2 the prior month, reflecting an increase in orders and capital spending. The Federal Reserve Bank of Philadelphia’s expectations increased to a three-month high in January, as total sales and employment showed steady improvement. 2. U.S. industrial production rose for a fifth month in December 2013, capping the strongest quarter since 2010, while capacity utilization inched up accordingly. Industrial output, the key to overall manufacturing comeback, rose 6.8 percent in the final three months of 2013, the most since the second quarter of 2010. Even home construction ended the best year for the industry in 2013, the most promising year since 2007. 3. While the automotive sector is looking forward to another 16 million cars and trucks emanating from U.S. factories—both American and foreign brand names—equally promising is export activity, anticipating worldwide liquid natural gas shipments, oil derivatives and even the possibility of crude oil, as shale fracking picks up the pace from current and planned expansions.Despite continued concerns from EPA and allied private pressure groups, the sheer momentum of this addition to billions of revenue dollars, as well as the tens of thousands of new jobs, will prove overwhelming. 4. The relative calm of the unexpected joint compromise effort by both houses of Congress to fend off debt-ceiling confrontations and credit agency downgrades will give a vast number of businesses and industries the confidence of not being sandbagged by federal interference in midstream. This alone may instigate release of the more than $1.5 trillion now reposing in the coffers of expansion-minded, privately held corporations and will likely provide the stimulus of a long frozen hold back, with tens of thousands of companies ready to respond to awakening opportunities.With consumer confidence indicating reasonable optimism, such expansionist tendencies may accelerate even more as growing confidence is rewarded by less federal-government interference.
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