Economic Impact of Nonresidential Construction: Insights from NABE Roundtable Webinar
On April 8, 2010, the NABE Real Estate/Construction Roundtable webinar, featuring Ken Simonson, Chief Economist at AGC of America, explored the economic impact of nonresidential construction. Key insights included that every $1 billion of construction generates approximately 28,500 jobs, affecting the economy through direct, indirect, and induced effects. The total construction spending trends were outlined for private nonresidential, public, and residential sectors, along with a housing outlook indicating varied improvements for single-family and multifamily starts. The session highlighted essential data for industry stakeholders.
Economic Impact of Nonresidential Construction: Insights from NABE Roundtable Webinar
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Presentation Transcript
Digging into Construction Data NABE Real Estate/Construction Roundtable webinar, April 8, 2010 Ken Simonson, Chief Economist AGC of America simonsonk@agc.org
2 Economic impact of nonresidential construction • Jobs: 28,500per $1 billion • 1/3 direct, onsite construction • 1/6 indirect (quarries, mfg., services) • 1/2 “induced” by spending from higher earnings of construction, indirect workers and owners • GDP: $3.4 billion • Personal Earnings: $1.1 billion Source: Prof. Stephen Fuller, George Mason University
Construction Spending, 2000-2009 GDP and Construction Spending (SAAR Annual Level, $ in billions) Construction as a % of GDP GDP Construction Source: Census Bureau, Bureau of Economic Analysis
4 Construction spending by segment, 1- & 12-month changeSeasonally adjusted annual rate (SAAR) nTotal Construction ($846b, -1.3%, -13%) Private Nonresidential ($303b, -0.4%, -24%) Public ($293b, -1.7%, -5%) Private Residential ($251b, -2.1%, -3.8%) Source: Census Bureau
6 Housing outlook • SF: starts, permits should rise throughout ‘10 • MF: No improvement likely until ‘11 - Rental demand hurt by job losses among would-be renters and by first-time homebuyer credit - Supply swelled by owners and banks who are trying to rent out houses and condos - Banks remain unwilling to lend to developers Source: Author
7 Nonres totals (billion $, SAAR), share, 1- & 12-month change Source: Census Bureau
Construction spending: industrial, heavy (billion $, SAAR) 2008, 2009,2010 8
9 Construction spending: public works (billion $, SAAR) 2008, 2009,2010
10 Construction spending: institutional (private + state/local)2008, 2009,2010
11 Construction spending: developer-financed (billion $, SAAR) 2008, 2009,2010
Predictors of construction demand 12 Architecture & engineering services empl. Source: American Institute of Architects, BLS
13 Summary for 2010 • Nonres spending: 0 to -5% (more stimulus put in place, maybe gains in retail, higher ed, hospitals) • Res: +5 to +10% (SF up, MF down all year) • Total construction spending: -4% to +2% • Materials costs: 0% to +8% • Labor costs: +3% or less Source: Author
14 AGC economic resources (email simonsonk@agc.org) • The Data DIGest: weekly one-page email (sign up: www.agc.org/datadigest) • PPI tables: emailed monthly • State and metro data • Stimulus info: www.agc.org/stimulus • Webinars (May 4 w/ AIA, Reed) • Feedback on stimulus, credit, costs
15 NABE - Setting the pace in business economics • Professional Development Seminar: DC, 4/12-14 • Housing and construction session • Annual meeting: Denver, 10/9-12 • Real Estate/Construction Roundtable • Webinars, annual & spring meeting programs • Statistics Committee …much more at www.nabe.com Source: Prof. Stephen Fuller, George Mason University
