Here's some perspective to ring in the new year: “2020 bad, 2021 good.”
That’s the takeaway from construction observers looking ahead at the turn of the year, even as the bleakness of the pandemic surge and record deaths in the U.S. continue to weigh on their minds.
“My expectation is that the U.S. economy will shrink between 4% and 5% in 2020,” said Anirban Basu, chief economist at the Associated Builders and Contractors during a year-end webinar, where he also made the good-bad prognostication quoted above. “But we’re going to come back hard in 2021.”
There are reasons for hope, such as a second coronavirus vaccine being authorized for emergency use and shipped in recent weeks and the $900 billion relief package recently signed by President Trump. But the drivers of optimism among those who track construction are also more specific to the space, while encompassing fundamental shifts in markets and processes that will lead to more broad-based development activity in 2021.
Just listen to Tom Stringer, managing director for site selection and business incentives at professional services firm BDO, whose job is to find suitable development sites for corporate clients who want to build new facilities and offices.
“Site selection tends to be a leading indicator in the economy that businesses are starting to think about capital investments, and our phones have been ringing,” Stringer said. “So if your readers are the folks on the contracting side, well, they’re about to get busy, too.”
Stringer isn’t alone. According to a post-election survey of engineering and construction executives conducted by Deloitte, 68% of respondents characterized the business outlook for the industry as somewhat or very positive.
“We do see pent-up demand sitting out there as we end out 2020 and come into 2021,” said Michelle Meisels, Deloitte’s engineering and construction practice leader.
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