BLOG: Economic Insights for 2017
Four factors look to shape the Industry in 2017.
📅 Mon December 26, 2016 - Edition
Contractors' number one concern is finding enough qualified workers.
As we head further into the fourth quarter of a year I enjoy seeing the economists emerge from the shadows with predictions and projections for the next year. We like to make fun of them because they can't do what we hope they could do: predict the future. Economists, meteorologists, and psychologists have it rough because the average doofus has no clue what they actually do to try to pin a bead of mercury on the table.
One economist who I sort of like (notice how I've tentatively phrased that) is Ken Simonson, the chief economist of the Associated General Contractors of America (AGC), who we hope understands the construction market. In the same way I trust a winter weather forecast for Wisconsin (where I live) coming from a meteorologist in Wisconsin, Minnesota, or Michigan (as opposed to a talented and brilliant weather expert living in Key West, who wears flower-pattern shorts and a Margaritaville t-shirt), I got to hope Simonson is closer to accurate in his forecasts for the construction market.
Simonson was at a recent AED/AEM (Association of Equipment Dealers / Association of Equipment Manufacturers) Equipment Economic Forum where he offered forecasts for key drivers and disruptors for growth in 2017.
His four industry trends are:
1. The economy will keep growing and construction will keep growing – “We'll continue to see strong growth in office construction, apartment construction, selected areas for power construction including pipelines, renewables, gas-fired power plants … and overall private non-residential and residential construction will be positive.”
2. Expect volatility in the energy sector – “I've been following oil and gas prices for 45 years and have never gotten it right…so don't take this too seriously. I think we can always expect volatility…that's always true, but I don't see a big upward movement. I think we'll gradually see more development of oil and gas fields, more fracking occurring, but not getting back to the levels of 2011-13, but better than the low point of 2015-16.”
3. Contractors' number one concern is finding enough qualified workers – “Contractors number one concern in most parts of the country is finding enough qualified workers so they have been actively working with high schools, community colleges, local training programs to improve that pipeline of people coming into the industry and get the word out to students and people looking to change careers that the construction industry is hiring, keeping workers on, and there's room for advancement. It's no longer a low-tech business – we use drones, GPS. Laser-guided equipment – it really has a lot of opportunities.”
4. Global economy could be bad news for exporters – “There is a huge uncertainty as to what the political environment is going to be. Certainly if the country becomes hostile to immigrants and iwe push people out who have already been working here or we keep people from coming in it will be very hard to find qualified workers. There is a lot of question as to whether the global economic expansion will resume, if not that is bad news for exporters and also businesses that rely on tourists and investment from abroad. So, those are the major concerns I have. Overall I think the world economy will gradually improve and the U.S. economy will keep growing.”
O.K. my turn. Here's my predictions. Here's my forecast for winter 2016-17 in Wisconsin: cold and snowy, with at least one blizzard.
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