Back in April, Caterpillar CEO Doug Oberhelman looked at the world economy and Cat’s place in it and opined, “I think we are closer to the end now.” Yet since he spoke, the official growth rate for 2011-14 was lowered to 2 percent and 2nd-quarter growth was lackluster. The end game for this downturn keeps receding. The good news is, it will eventually.
Sixty-five percent of people polled by an economist believed the U.S. still is in recession. Technically that is not true. It just feels like it. Most economists, having pored over their arcane data, predict that economic activity will be stronger in 2016. Two things about such predictions: To say things will be better is not saying much, and they have been wrong about next year for several years now.
The story for construction is somewhat more upbeat, with growth this year in the 3.5-4.5 percent range. Furthermore, the industry is expected to ratchet nonresidential building up 6 percent or more next year. That prospect will be helped by passage of a long-term highway funding bill, of course. That a third of states are increasing transportation spending is a good sign.
So what is a contractor supposed to do amid all this economic guesstimating other than avoid whiplash in a fits-and-starts economy? Survive, first of all, which many contractors have done nicely by pruning costs and solidifying their core business. They would like to start expanding again but have little justification for doing so.
One idea is to start building up a work force. It probably is too early to start forming full crews again, but sponsoring equipment operator and construction trade classes is timely. Everyone knows that luring a new generation of construction workers and technicians into the industry is a necessity. If the wheels of construction are to really start turning next year, now is the time to prepare, if not yet hire, the people to turn them. After all, doldrums eventually do end.
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