The overall U.S. economy is projected to grow through 2017 and 2018, with nonresidential construction growing through 2019, said economist Jeff Dietrich yesterday during the Glazing Executives Forum, held in conjunction with GlassBuild America in Las Vegas.
Dietrich, who is senior analyst for ITR Economics, encouraged the group of about 200 registered attendees to make investments now to better their companies. “Many have been extremely cautious since the downturn. Get away from the crash site and start looking forward,” he said. “The U.S. is the most stable economy in the developed world.”
Dietrich noted that, despite recent growth, construction spending remains well below peak spending levels. However, he says the measured growth the industry has experienced is healthy growth. “Companies have right sized; capacity utilization is near normal,” Dietrich said. “When will we be back to the peak? Probably not in the near term. … I hope we don’t get back there anytime soon. I’d rather see measured growth than volatile cycles.”
Interest rates are expected to rise in 2015, “but we don’t know by how much,” Dietrich said. “If you want to borrow money, now is time to do it, with interest rates low.”
In addition to investing in machinery, equipment and facilities, Dietrich also recommended that companies invest in their employees. With the economy improving, and with a building shortage of skilled labor in construction, dissatisfied workers will leave. During the downturn, “people were just happy to have a job. But that’s over. The next five years will be similar to 2003 to 2008. If you’re not paying people enough, you’re going to lose them,” Dietrich said. “You’re going to be poaching, or others will be poaching from you.”