The ‘Great Recession’ theoretically lasted about 18 months, from 2007 to 2009. Recovery has been agonizingly slow in many industries but we are now in 2015 and the construction industry is more rapidly shrugging off the residual effects of the recession.
How Bad Was It?
Even though construction industry is cyclical and recession typically follows a boom period, nothing could have prepared it for the harsh and widespread reach of the recession:
- Residential: Homeowners defaulted on homes and others delayed buying homes, leading to a glut of residential real estate languishing in realtors’ inventory.
- Commercial: Commercial construction also was hard hit, severely impacted by the federal budget sequester and eventual-but-temporary shutdown, followed by scaled back government spending, and sharply reduced lending practices.
- Institutional: Institutional construction remained stagnant, affected by the same limitations and funding problems that the commercial construction sector faced.
How Were Construction Workers Affected?
Nevada, California, Florida, and Arizona are typically areas with plenty of construction work. But the recession changed that:
- Nevada employed an estimated 146,000 construction workers at the peak of its construction boom. That number was reduced by 59 percent.
- Arizona’s construction employment dropped 50 percent from its pre-recession industry peak.
- Florida was close on the industry-related unemployment heels of Nevada and Arizona, losing 40 percent of its construction workforce.
- California fared better but still recorded a 28 percent drop.
- According to the U.S. Bureau of Labor Statistics (BLS), approximately 2.3 million construction workers lost their jobs in the recession (nearly 30 percent of the total number of lost jobs).
- The overall construction industry has school painter an estimated 1.4 million fewer construction workers in 2015 than it did in 2007.
The Construction Outlook in 2015 and Beyond
Happily, the U.S. and its construction industry continue to move away from the harshest effects of the Great Recession. Industry observers expect to see these improvements:
- Non-residential construction: picking up and looking more solid, especially with the expected 2.6 percent real GDP growth in 2015. This sector may rise by 8 percent with growth in office buildings, hotels, and industrial facilities