Construction Sector Anticipating Obama Boom

The markets are trying to figure out what the latest stimulus plan will mean to companies but there is already one sector that is expecting to see some real progress, and soon. Whatever else comes out of this package, it is obvious that infrastructure and construction will be part of it. It has been estimated that there are over 3,000 projects that have been delayed due to funding and could be launched with essentially a moment’s notice. This amounts to some $20 billion in project work that could be started immediately and that could go a long way towards recovering some of the 62,000 jobs that have been lost in the construction industry in the last 18 months. The challenge to this plan so far has been that these projects are far from universally distributed and there will be political demands to spread the stimulus more broadly. This will happen over time but initially the money will flow to those areas that are best positioned to move swiftly.

On the professional side, the boon will be focused on the engineering firms and others that will be planning the next wave of projects. It is one thing to add back some 62,000 jobs but that is a long way from 2.5 million. To make a dent in that number means some massive efforts on the construction side.

Analysis: At this stage there are only rumors but the scale of the task means that some very big ideas will be needed. Two that have started to develop include a series of major new highways that will mark the most significant addition to the Interstate system in decades and a series of proposals to reinvigorate passenger rail with the development of high speed trains along the lines of what exist in Europe and Japan. Both of these efforts would be monumental and would play a role in economic development for years to come.

The interest in the high speed train idea is growing as both a means to stimulate the economy and as a way to react to the other message in the Obama plan—be green. The ideas have ranged from building a new system on the east coast to developing a transcontinental version. It is expected that initial efforts would track along the areas of densest population but at some point a connection system might be devised. It would also not surprise many if Chicago became a hub of some of that activity—especially given the need to address job issues.

Source: Armada Corporate Intelligence

Leave a Reply

Your email address will not be published. Required fields are marked *