Blue
November 28th, 2009, 03:15 PM
Construction unemployment through the first ten months of 2009 has reached an average is nineteen percent and is sure to reach twenty percent by the year end. http://www.slideshare.net/hurleyb
As the construction cycle starts its natural downward movement with projects having reached completion it will leave over twenty percent of the workforce ideal. There is nothing new about the cyclical nature of the annual project lifecycle; which for the most part includes design, bid, construction and completion. By reviewing my latest graph and spreadsheet at http://www.slideshare.net/hurleyb ; the cyclical nature of construction employment is evident as projects move into the construction cycle in the spring, you will note that the employment levels increase from roughly May through October. However due to the lack of demand for investment oriented and institutional construction spending is moving toward one its lowest levels in history and its effects are evident in my graph. The weakness in the industry is directly related to the US Unemployment rate and the still high level of toxic paper being held by local financial institutions. Many of these smaller and community banks have unsecured loans tied up in new empty office buildings, hotels, apartments and condos; as a segment the commercial real estate crisis still has not hit bottom. This combine with the state tax crisis made the construction of institutional buildings impossible as school districts are reflowing teachers and state prison systems laying off employees and even releasing prisoners to save money. You will be hearing more from me, but it is very evident that a recovery for the construction industry will take many years once it starts.
by Doug Bevill, Founder & President at Bevill & Associates
As the construction cycle starts its natural downward movement with projects having reached completion it will leave over twenty percent of the workforce ideal. There is nothing new about the cyclical nature of the annual project lifecycle; which for the most part includes design, bid, construction and completion. By reviewing my latest graph and spreadsheet at http://www.slideshare.net/hurleyb ; the cyclical nature of construction employment is evident as projects move into the construction cycle in the spring, you will note that the employment levels increase from roughly May through October. However due to the lack of demand for investment oriented and institutional construction spending is moving toward one its lowest levels in history and its effects are evident in my graph. The weakness in the industry is directly related to the US Unemployment rate and the still high level of toxic paper being held by local financial institutions. Many of these smaller and community banks have unsecured loans tied up in new empty office buildings, hotels, apartments and condos; as a segment the commercial real estate crisis still has not hit bottom. This combine with the state tax crisis made the construction of institutional buildings impossible as school districts are reflowing teachers and state prison systems laying off employees and even releasing prisoners to save money. You will be hearing more from me, but it is very evident that a recovery for the construction industry will take many years once it starts.
by Doug Bevill, Founder & President at Bevill & Associates