The Associated Builders & Contractors chief economist, Anirban Basu, provided a look at the past, present and future of the economy during the opening session at the Carolinas Construction Conference last week. In a state-by-state analysis, Basu sees NC and SC in a “recovering” mode. Click Here to view his presentation.
“For the 15th consecutive month, private nonresidential construction spending in the U.S. has fallen, slipping 0.5 percent in June,” Basu said. From June 2009, private nonresidential construction spending is down 24.1 percent. In contrast, total nonresidential construction spending – which includes both private and public construction – was up 0.4 percent from May. “But this is 15.2 percent lower from the same time last year, Basu added.
“The explanation behind the ongoing decline in construction spending continues to follow the same story line – tightened credit lending standards, elevated vacancy rates and generally insufficient levels of job creation,” said Basu. “With the momentum of the U.S. recovery now waning, it will be many more months, if not years, before privately financed activities begin to recover in earnest. “Recovery for office, retail and other construction components being stimulated indirectly is probably at least two years away,” he said.
NC lost 20,300 jobs during the period between June 2009 and June 2010. SC lost 8,700 construction jobs during the same period. Currently the overall unemployment rate in NC stands at 10 percent. According to the BLS, the SC unemployment rate stands at 10.7 percent.
“From a broad economic perspective,” Basu reported, the Carolinas have weathered the worst of it.” Publicly financed activities continue to expand, particularly those most closely aligned with the stimulus package passed in February 2009,” Basu said. “For many contractors, the stimulus has ushered in a reasonably busy period. However, even these contractors have reason to be nervous since the stimulus money will eventually run out.”