PCCA Journal|2
nd
Quarter 2013
7
T
he construction industry downturn that fol-
lowed the Great Recession proved to be the
most severe and prolonged decline in most of
our lifetimes. For the last 24 months, most of
our industry has bumped along the bottom
of the cycle and has shown few signs, if any, of a pending,
robust recovery.
Meanwhile, the adversarial political climate in Washington,
D.C., and ineffectual federal policies have failed to stimulate
strong Gross Domestic Product (GDP) growth and rising
employment but have managed to increase the national debt
to more than $16 trillion—equivalent to the total U.S. annual
GDP.
Loss of Middle-Skill Jobs
The broader economy is not performing much better. The
federal government’s official unemployment rate as of March
13 was 7.7 percent, and the real unemployment rate is likely
closer to 10 percent (see Exhibit 1). Moreover, manufacturing
employment in the U.S. has declined by 19.6 percent, or 2.9
million jobs, over the past decade. Since the end of the Great
Recession in June 2009, the manufacturing sector has added
only 230,000 jobs. The loss of manufacturing and other
middle-skill jobs in the U.S. workforce is a primary factor
behind our nation’s shrinking middle class, which has been
the mainstay of our economy for a century.
Is America in Decline?
Instead of optimism, editorial pages and cable news talk
shows continuously debate the decline of America’s political
and economic leadership, while touting the rise of China and
other developing economies. A December 9, 2012,
Washing-
ton Post
editorial made the case that the economy has created
a “lost generation,” and a 2012 Gallup poll reported that 53
percent of Americans consider China the world’s dominant
economy. Can this be true? Is the U.S. a declining economic
power?
The answer to such questions in the past usually came in
the form of robust recovery that time after time propelled the
U.S. forward as the world’s largest economy. Since World
War II, the main drivers of each recovery have been federal
spending, technical innovation, residential housing, and/or
consumer spending. Unfortunately, none
of these forces will be the catalyst to get
America and its construction economy
growing faster in 2013.
No More Federal Stimulus
In order to have sustained economic
growth with full employment (less than
6.5 percent unemployment), U.S. GDP
growth must rise to more than 3 percent.
It is clear that federal stimulus spending
and a decade-long funding of two wars
have had limited, if any, sustained impact
on the private-sector economy. Looking
ahead, as the political drama of sequester
plays out in Washington, D.C., it is fairly
safe to assume that further government
A Case for Optimism in the U.S.
Construction Industry
The idea that North American energy independence is achievable has major geopolitical
implications for our country.
By W. Chris Daum
Percent
0
2
4
Exhibit 1
U.S. Unemployment
12
6
8
10
Unemployment
Approximate full employment
12/02
6/03
12/03
6/04
12/04
6/05
12/05
6/06
12/06
6/07
12/07
6/08
12/08
6/09
12/09
6/10
12/10
6/11
12/11
6/12
12/12
Continued on page 8
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