Construction industry struggling to rebuild | The Augusta Chronicle

The failure of federal and state policy makers to proactively take on the housing bubble (and inevitable mortgage crisis) has been devastating to the economy. 

 

The failure of Republicans in this state to run a sustainable budget---yes, Republicans run the state no matter how many times they say Obama name it won't change that fact--has hindered our economic recovery and harmed the quality of life for our citizens.  At a time when there is an aggregate demand problem in the economy the last thing you want is for state government to be laying off workers and cutting spending. 

 

The budget cuts and job losses mean money is not going into the local economy at a time when it needs it the most.  The budget cuts fall especially hard on the most vulnerable segments of our state (the poor, the elderly, the unemployed).

 

The August Chronicle:

"I think that 2011 will be worse than 2010 for me," McKnight said.

The weak demand for office and retail space, state and local revenue problems, and tight credit conditions continue to contribute to the industry's decline, Simonson said.

In July, total construction spending dropped to a 10-year low of $805 billion nationwide, as investments in construction projects are now 34 percent below their peak in February 2006, he said.

"While the stimulus is funding some vital infrastructure projects, the private sector is too cautious and state and local governments are too cash-strapped to help. As a result, overall construction spending is at its lowest level in a decade and hundreds of thousands of construction workers are unemployed," Simonson said in a release.

Nationally, construction employment has continued to drop, though other types of employment have been rising most months this year. Construction employment started falling about one year before the rest of the economy began to lose jobs. The industry's employment peak occurred in August 2006, he said.

"Since then, the industry has lost more than 20 percent of its work force; 2.1 million jobs have disappeared in construction," he said.

In August, the industry reached a 17 percent unemployment rate. During the past year, 274,000 construction workers have lost jobs.

Based on data from the Bureau of Labor Statistics that combine the construction, mining and logging industries, the Augusta metro area had a 3 percent drop in employment from July 2009 to July 2010. The area fared better than Atlanta, down 6 percent, and Savannah, which had a 4 percent drop.

In Georgia, construction employment fell 7 percent, he said.

"We're definitely still struggling," said Cyndi Brush, the owner of Brush & Associates LLC. "We've had to cut our staff, prices on houses, building expenses. We've had to cut everything. Just trying to stay alive."

She and her husband, Art Barrera, have slashed housing prices by $35,000 to $40,000 to unload the inventory. Brush doesn't think the industry will improve until changes are made on the government level.

Keystone Homes is having a strong year so far, but CEO Lamar Crowell said he is "nervous to say anything about recovery."

When the homebuyer tax credit ended, home sales "went into a steep decline." The company started providing more value-oriented homes, he said.

Pierwood Construction Co. is still operating at reduced staffing levels and is reluctant to bring in new employees, president Ken Richards said.

"We're very fortunate to be where we are compared to other parts of the country, but it's just been a roller coaster ride for probably the last two years. It's very up-and-down," Richards said.

Local builders have to compete with Atlanta-area companies, who are in the area seeking work because their market has gotten so bad, Richards said.

There are some signs of hope, however, such as new jobs coming to Plant Vogtle.

"It's just a matter of when those different things are going to start coming together and people are going to start buying houses," Richards said.