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Experts forecast good news – bad news for local economy
The bad news is things aren't getting better very quickly.
The good news is that they are getting better and they'll keep getting better.
That was the message Oct. 13 when two local economic experts offered their outlook to the Prince William Chamber of Commerce.
“Things aren't stopped, they're just not moving very fast,” said Stephen Fuller, director of George Mason University's Center for Regional Analysis.
A lot of that is due to consumer confidence and the continuing construction slump.
But by 2018, Fuller said, “we'll have more jobs than people.”
Fuller estimated that in seven years, 6 million jobs will be unfilled with employers desperate for older workers to return to the job market.
Most of those careers will be “brain jobs” in science, technology, engineering in math, he said, in part because young students continue to choose liberal arts degrees over science and math.
Those older workers will need to be retrained, Fuller said, but they'll change the face of the economy.
The other good news, he said, is that the economy is continuing to add jobs in many sectors. It's just losing them in others.
In the D.C. Metro region, professional services, health, education, retail and hospitality have all been growing in the last few months. Construction, information and manufacturing have shrunk but as those industries stabilize, having lost as much as they will lose, the overall numbers will grow.
“Part of the recovery is to stop bleeding,” Fuller said.
And even the construction slump has a silver lining in that the economy is continuing to improve slowly even through construction isn't contributing at all.
“We're running on five of six cylinders,” Fuller said.
Pointing to a chart showing unemployment at 9.1 percent, Fuller said the construction pickup “will take a million workers out of this pile” of unemployed people.
Honing in on the construction market, Ken Simonson, chief economist at AGC of America, later told the chamber audience that money spent on construction has a huge ripple effect on the local economy.
Every $1 billion spent on nonresidential construction equates to 28,500 jobs, Simonson said, citing figures Fuller had once presented in Congressional hearings.
Those jobs aren't just construction workers, Simonson said. Only one-third of those jobs are “hard-hats.” One-sixth are supporting positions in quarries and professional services like architects.
The other half? Those are jobs that come from the money the others spend on food, utilities and other products and services.
So the construction slump has been significantly responsible for the damage to the overall economy but Simonson said better times are ahead.
Between 2012 and 2016, construction “will continue to pick up” both regionally and nationally, he said.
“We won't have nearly as much” construction on single family homes, government offices or retail, but “power construction” – plants and mining operations to create various types of energy and fuel – will be on the rise.
As for new home construction?
“We've given up forecasting when single family will pick up,” Simonson said. “When it does, it could pick up a lot because it's been so low.”
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