According to global business consultancy Deloitte, the construction industry added more than $900 billion to the US economy in the first quarter of 2020, its highest level since the 2008 recession. As of February 2020, the industry employed 7.64 million people across the United States. When Covid hit, as elsewhere around the globe, the industry was decimated, causing losses of $60.9 billion in GDP and decreasing total jobs to roughly 6.5 million, wiping out two years of GDP gains and four years of job gains.
However, it wasn’t the first time in recent history that the industry had been hit with a crisis. Learnings from the global financial crisis in 2008 meant that the US construction sector was better placed to respond to the economic shock caused by the pandemic, with improved control over its leverage and credit, and a financial buffer created through additional cost savings.
That being said, industry performance throughout the remainder of 2020 was mixed, due to the knock-on effect of the impact on exposed sectors such as retail and leisure, added to the increased demands and challenges faced by the global supply chain.
Despite these challenges, there is cause for optimism. A recent report by Researchandmarkets.com has suggested that US construction output is set to grow by 1.4% in 2021, and by 2.3% to 2025. In addition, data released by the US Bureau of Labor Statistics and analyzed by the Associated Builders and Contractors revealed that the construction industry added 110,000 jobs in March, taking the total number of jobs added since April 2020 to 931,000, a recovery of 83.6% of the jobs lost during earlier stages of the pandemic.
Researchandmarkets.com also point to the activity of the current US administration as being highly influential on the rate of recovery and growth for the sector in the coming months and years. With President Biden having committed to vaccinating the US adult population by September of this year, as well as pledging significant investment in a Covid rescue plan, there are positive signs that growth could exceed the predicted 2.3% by 2025.
In addition, President Biden is calling for a $2 trillion investment package with a focus on transport infrastructure and clean energy to be deployed over the next eight years in order to achieve a 100% clean energy economy and net-zero emissions by 2050. This investment is likely to have a significant impact on construction output and growth across the US to 2025 and beyond.
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