The sun is shining for the economies of the United States and Canada.
Associated Contractors and Builders Inc. chief economist Anirban Basu and Reed Construction Data vice president and general manager Mark Casaletto agreed that their respective economies are in sound shape and will continue to improve in 2014.
“The construction outlook hasn’t looked better in the last six years,” said Basu, who spoke to delegates at the 8th International Open Shop Conference (IOSC8) and BizCon 2014 in Maui.
From a macro level, everything is on the rise, he said, but cautioned that continued injections of liquidity into the economy by the U.S. Federal Reserve makes the economy appear to be even healthier than it really is.
Sectors are still recovering and rebuilding from the financial crisis of 2008.
“However, there has been progress. More states are in recovery mode and a few are expanding,” he said.
Casaletto told delegates that historically, “when the U.S. catches a cold, Canada gets pneumonia,” but because of Canada’s strong resource economy it weathered the financial crisis with less damage than most economies.
“Canada is one of the few nations in the world that brought back every single job lost during the downturn,” he said.
He pointed to commercial construction as a factor in job creation for the service industries, and said that growth had never stopped in Canada, with office vacancy rates sitting at less than seven per cent across the country.
The housing market has also been active, with condominium construction booming in Canada’s urban centres.
“The demand is there,” Casaletto said.
The housing picture is mixed in the US, Basu said, but is coming back.
The backlog of commercial construction is also rising, and “architects are getting busier,” he said.
He added that jobs are on the rise in the construction sector, and California, Georgia and Florida are improving, all states that were hit hard by the collapse of the housing bubble. Another sector that has experienced tremendous growth is oil and gas, with shale exploration and other sources creating an oil boom in the U.S. that actually precedes the financial crisis of 2008, Basu said.
Civil construction is the prime driver of the Canadian economy, Casaletto said, and it is resource-based.
Energy is a prime export, but Canada is also exporting metals and uranium to China, he said.
“Even lumber has restarted thanks to the US housing market recovery,” he added.
Potential stumbling blocks for Canada include infrastructure, which “pardon my Canadian<0x2026> sucks,” Casaletto said, adding that infrastructure needs to be modernized and expanded.
“There will be a huge investment in Canadian infrastructure over the next 10 years because we need it and we’re building where we’ve never built before,” he said.
The most stable source for the economy has been consumer spending, pre-recession and post, Badu said. Government spending and net exports have been less stable. Casaletto concurred.
“Canada never really stopped spending money and we’re all excited that America is spending money again,” he said.