Trophy Jobs Exist in This Uneven Market

June 22, 2012
Despite the uneven recovery, major construction and redevelopment projects in some cities bode well for the construction market and the companies that supply it.

While the construction industry seems to be slowly crawling up from the bottom of one of the worst downturns in history, progress has been slow and uneven. With the recent economic jitters, you might think big construction projects have come to a crashing halt (again).

That’s not the case from what Electrical Marketing’s editors learned from researching news reports of various new construction projects underway or soon to start across the United States.

Still, several trade associations and construction industry economists point to an uneven recovery that depends on the region and type of work. Associated General Contractors, Washington, D.C., said in a press release that according its analysis of Labor Department data, more states lost construction jobs in May than at any point since June 2011, as 30 states experienced annual job losses and 27 states and D.C. lost jobs during the past month. AGC said the weak state construction employment figures come as public investment in construction decline and the federal transportation program is at risk of shutting down on June 30.

“As the public sector continues to restrain growth in construction demand, we will continue to see weak reports like this,” Simonson, the association’s chief economist said in the press release. “There isn’t enough demand for private sector structures to compensate for dwindling investments in highways, bridges, water systems and public buildings.”

McGraw-Hill Construction said in a press release accompanying the latest data in its new Dodge Momentum Index that the softening of business in the construction market last month “was the result of a divergent pattern for the two major segments of the Dodge Momentum Index, as a 1.5% gain for institutional building was outweighed by a 4% decline for commercial building.”

“The institutional building portion of the Index was aided by several large education projects that entered the planning pipeline last month including a $300 million renovation to the New York Public Library’s Fifth Avenue flagship building. Given current tight fiscal conditions within state and local governments, however, the recent trend for institutional building projects at the planning stage has been flat-to-down. The commercial building portion of the Index pulled back in May after showing gains in recent months. A decline in new planning projects for office construction was responsible, only partially offset by a greater volume of planning projects for stores and warehouses.”

However, some cities are committed to major redevelopment projects that should bode well for the construction market and the companies that supply it for years to come. According to The Boston Globe, construction projects along the 47 miles of Boston’s waterfront are bringing new life to neighborhoods near the Boston Harbor, which just two decades ago was a badly polluted embarrassment to the city. Today, several major mixed-used residential/retail projects are planned, and Vertex Pharmaceuticals is building a two-building, 18-story headquarters.

New York also has several major projects planned underway, including the Freedom Tower and other office buildings being built in lower Manhattan, and a $3 billion project in Queens that would transform a dodgy 20-acre parcel near the New York Mets’ Citi Field known best for its junkyards, auto repair ships and as the “Valley of Ashes” made famous in Fitzgerald’s “The Great Gatsby” into a mix of retail, hotel and commercial space.

As you can see in the chart on this page, other cities, including Philadelphia, Washington, D.C., and Long Beach, Calif., also have major construction projects underway or on the drawing boards that will create new business opportunities for the electrical market.