Resources // Blog
-
Where's the economy going?
It’s hard to believe that the recession has been over for two years. Employers aren’t hiring, developers aren’t developing, builders aren’t building, and shoppers aren’t shopping. So what’s happening? A couple of things are at work here. First, employers are finding out how to do more with less. That means that even though they are recognizing growth as a whole, they are meeting their needs with the same number of employees. Developers are still having a hard time justifying building space for employers who are reluctant to hire and the financers of those projects have the same concerns.
If people don’t hire, nobody has additional money to do the shopping. If nobody does the shopping, the employers don’t need to create more of what people shop for. Where will it end? No, seriously, where will it end? I do not have the definitive answer, and neither do the “experts.” I put “experts” in quotes because for every position one expert has, you can easily find an expert with the opposite opinion – on just about any topic.
However, there is a mindset that we have to position ourselves for the “new normal.” That means making decisions as if the economy were not going to improve beyond where it is today. I don’t think that’s a bad position to take right now. How harmful could it be to try to be more efficient, more productive, and do more with less. That’s the mantra of business, after all.
With all that said, many of the experts are speculating that the economy will continue to be stagnant through 2012. According to McGraw-Hill Construction, the U.S. construction starts for next year will remain essentially flat. The level of construction starts in 2012 is expected to be $412 billion, following the 4% decline to $410 billion predicted for 2011. That’s only another year and we should see some easing. Actually, we’re starting to see some improvement already. I believe the A/E industry is a leading indicator of leading economic indicators. Nobody can build it before we design it. We are seeing more activity in private sector markets at H&A and, anecdotally, I am hearing a lot of positives in the industry about work picking up. I feel that we will see our work continue to increase and the economy as a whole to start improving in 2012.