This is a post from Jim Haughey's blog that covers the US construction industry.

Jim Haughey is the Chief Economist for Reed Construction Data and has over thirty years experience as a business economist, including twenty years monitoring the construction market. He has a Ph.D. degree in economics from the University of Michigan and has previously taught at the University of Michigan, Ohio University, Michigan State University and the University of Massachusetts.

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Construction Industry Forecasts

Notes from Jim Haughey - Mar 07, 2010

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Contractors hiring in California
Jim Haughey, RCD Chief Economist

California has a relatively small share of its workers employed in health, education and government.  Each of these industries avoided large declines during the recession but is now sagging, as always, early in the recovery period. California has about an average share of its workers employed in manufacturing and finance. Both of these industries had huge layoffs early in the recession but are now recovering.  California has a very high share of workers in the now rapidly growing technology manufacturing sector and a relatively low share of workers in the weakest part of the finance industry – backroom credit card and mother transactions processing. California has a relatively large share of workers employed in both the leisure and hospitality and professional and technical industries.  Each of these plunged early in the recession and are now recovering strongly.

The California economy is being restrained by the still unsolved state budget deficit problem. This restraint will worsen in the next few years unless the unsustainable state spending model is changed substantially.  But a rapidly growing private economy makes the budget problem easier to solve.

The exodus of industries and jobs from California in recent years contributed to the budget problem.  People and jobs went to less expensive nearby states, boosting economic growth in the northwest and the Rocky Mountain regions. This exodus is slowing.  The economy is worse in nearby states which are still shedding jobs. The price of homes has dropped more than 30% in California.  This makes it easier to attract people to California. It also traps many people in California whose mortgage balance is more than the home’s value.

 


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Read Other Recent Jim Haughey Posts

08/15 - Contractor Survey: Work backlog rises in 2nd Q but may fall in the summer
08/09 - Modest construction recovery will be supported by two more years of cheap credit
07/29 - Sour economic growth report threatens construction recovery
07/27 - Worry about the deficit not the debt limit
07/27 - Worry about the deficit not the debt limit
07/27 - Worry about the deficit not the debt limit
07/19 - Housing starts rebound.6% in June after two weak months
07/18 - Congress prepares to postpone resolving the deficit crisis assuring an extended period of subpar eco
07/12 - House Transportation Committee proposes to keep federal highway funding at fuel tax receipt level
07/09 - Don’t count on debt limit deal to restart sustained high economic growth
07/08 - Contractors cut 9,000 jobs in June
07/05 - The cost and frustration of selling a home contributes to the delayed housing recovery
07/05 - May construction spending down 0.6%; recovery still on hold
07/01 - FAA stops works on federally funded runway and control tower projects
06/21 - It is not more jobs that will quicken the economic recovery
06/16 - Mays’ 3.5% gain in housing starts does not signal a housing recovery immediately ahead
06/15 - Cautious spending threatens to delay construction recovery
06/10 - Economic and construction recoveries will be subpar for at least another year
06/09 - NYC construction unions may agree to drop expensive work rules to spur more work
06/04 - Contractors add 2,000 jobs in May; overall job gain disappointingly low

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