With construction spending at a 7-year high, single-family home starts up 19 percent year over year, and hiring at pre-recession highs despite a widespread shortage of skilled workers, it’s no secret within the industry that things have picked back up and then some.
And though financial analysts have largely taken a wait-and-see approach before hailing the industry’s rebound, most are now willing to label the industry as “booming,” and some are even going so far as to saying it’s turned into a full-fledged economic engine for the U.S. economy.
According to a report from MarketWatch, construction added 1.3 percentage points to a “solid 3.7% annual gross domestic product” in the U.S. during the second quarter. And the industry currently makes up nearly 5 percent of the country’s GDP, according to a note to clients from IHS Global Insight economist Patrick Newport.
Though some analysts feared a bit of backsliding from the industry in the third quarter, the July spending report from the Commerce Department assuaged any of those concerns, the MarketWatch report says. Thanks to private construction, particularly that of single-family homes, U.S. construction spending has reached $1.08 trillion, the highest level since May 2008.
“The overall impression from the past few months is that the construction sector overall is the strongest part of the economy, with spending up at a remarkable 26% annualized rate in the three months to July,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told the publication.