• Wasn’t Obama Supposed to Have Tanked the Economy by Now?

    Nov. 19, 2013
    Wasn't scary socialist Barack Obama supposed to be the business-unfriendly president who would destroy the U.S. economy? Well, we're a year into his second term, and the economy is still standing. In fact, construction and the stock market are happily humming along.

    We all remember the election-time rhetoric about Barack Obama. His business-unfriendly policies were going to ruin the U.S. economy. He was going to bring socialism to a town near you. Voting for him would be voting to end the economic world as we have known it, with a little fire and brimstone thrown in for good measure. Well, guess what? We’re a year into his second term, and the results are quite contrary to the fears.

    The stock market recently hit 16,000 for the first time. Obviously the president doesn’t control the stock market, but if businesses and investors felt they were under the yoke of a repressive, business-unfriendly administration, the market wouldn’t be booming.

    The Bureau of Economic Analysis recently reported that the real (net of inflation) gross domestic product (GDP) increased 2.8% at a seasonally adjusted annual rate in the third quarter, up from 2.5% in the second quarter. It’s not the 4 to 5% growth you’d like to see, but it certainly beats the heck out of the previous administration’s “worst recession since the Great Depression.”

    Closer to home in our industry, our friend Ken Simonson, chief economist for the Associated General Contractors of America, has lots of good news in his latest Data DIGest:

    “Construction employment rose for the fifth straight month, to a 50-month high of 5,834,000, up 11,000 from September and up 185,000 (3.3%) over the past year. Total hours worked (aggregate weekly hours) in construction increased by 3.8% since October 2012, implying that contractors are extending working hours slightly as well as hiring new workers. Residential construction employment (residential building and specialty trade contractors) climbed by 4,800 for the month and 103,600 (5.0%) for the year. Nonresidential employment (building, specialty trades, and heavy and civil engineering construction) rose by 6,600 and 81,100 (2.3%), respectively. The unemployment rate for jobseekers who last worked in construction fell to the lowest October level in six years — 9.0%, down from 11.4% in October 2012 and 17.3% in October 2010.”

    Meanwhile, FMI has released its annual U.S. Markets Construction Overview, which predicts that U.S. construction put in place (CPIP) will grow to $977 billion in 2014. 

    “With construction put in place at the end of 2013 expected to be at $909.6 billion, researchers at FMI predict CPIP growth rates to be slightly ahead of the gross domestic product in 2014,” the overview says.

    Other predictions from the FMI report:

    • Residential CPIP is anticipated to grow from $338.2 billion in 2013 to $379.6 billion in 2014.

    • Health-care CPIP is expected to grow 6 percent in 2014 to $44 billion.

    • Manufacturing construction is on the upturn, expected to grow 4 percent in 2014.

    Construction is up. The market is up. Does that mean everything is ideal? Of course not. Never has been, never will be. People can always (and undoubtedly always will) find negatives to point out. But I think it’s time to lighten up on the current chief executive. You may not agree with his policies, but it turns out he's not — and isn't going to be — the U.S. economy’s Grim Reaper.