“At some point, construction will recover; it always does,” Basu told more than 100 people in attendance. But for now, “less worse is the new excellent.”
The U.S. economy is in recovery, much of it motivated by the stimulus package. But that work is winding down and the private sector is not ready to step forward to create new jobs or start building again, Basu says.
Since the start of the recession, the construction industry has lost 1.9 million jobs. The U.S. economy now supports 25% fewer construction workers. However, Basu maintains, “things are getting better,” with private-sector job creation moving in the right direction. In Florida, the education, health care and hospitality industries have added jobs, but construction is still losing jobs. Orlando was the exception, with 600 more construction jobs in December 2010 than one year prior. Tampa, on the other hand, lost 4,500 construction jobs during that period.
“Things are turning around faster in Orlando than people realize,” Basu says.
Nationally, the American Institute of Architects’ architecture billings index shows an increase starting in October 2010. Basu indicates that means contractors should start getting busier in about 14 months.
“We have seen the worst of it,” Basu says.
Economic forum panelist Ted Garrison, of Garrison Associates of Ormond Beach, Fla., advised attendees to “get out of the building industry” and restructure to improve processes, to work more collaboratively, to shift toward integrated project delivery and to focus on solving owners’ problems.
Garrison recommends if health-care contractors spend the time to learn how hospitals operate, to become experts in the end product, they can build better facilities and deliver more value. He also suggests the industry needs to get rid of waste in the system and cut construction costs by 20% to 30%, something he says has been proven possible on jobs built as private-public partnerships. That does not mean building cheaper but rather finding ways to streamline operations. And he maintains the time to do that is now.
“The financial crisis is a blessing, because it has created a sense of urgency,” Garrison says. “We need to make fundamental changes if we want to survive.”