Construction Activity Is A Leading Economic Indicator
We can all agree that job creation is a hot topic when discussing the state of today’s economy. But, which jobs are the most crucial to create? What industries, when prospering, can help stimulate the economy? Experts agree that an increase in construction jobs can offer significant economic stimulus.
In Indiana, one dollar spent on construction activity can generate about $2.50 in economic activity. That statistic alone shows how important an active construction industry can be. However, these days, not enough is being invested in construction which leaves the future looking uncertain. Currently, construction accounts for about 2.5 percent of the total economic activity in Indiana which is down from the typical 5 percent. The number of construction workers employed across the state is also down, by 13 percent to be exact, from its peak high in 2005. Working Person’s Store recognizes how important these job are to working people and our economy.
Despite the slow recovery, construction employment in Indiana has been rising steadily over the years since the recession first hit, which is good news for the industry as well as for the state as a whole. In the past, more construction jobs and higher wages has led to new commercial construction activity, giving the construction industry hope for the future.
Construction also has a measurable impact on other industries. Indiana steel, for example, has remained constant. In fact, Northwest Indiana is producing more steel now than it did in the 1970s. Construction plays a part in the success of steel because manufacturers of construction equipment, such as John Deere, are large consumers of steel.
While it’s plain to see that a booming construction industry has benefits across the board, does it matter which projects the money is being spent on? Experts say yes. Large infrastructure projects such as the Milton-Madison Bridge in southern Indiana are crucial investments in roadways that serve state commerce. However, the impact on the economy that these large projects have is actually smaller than the impact of numerous smaller projects. The reason is that large projects cost more money, but less people are employed. This same phenomenon occurs in the aggregate (the primary ingredient in concrete) industry.
In Indiana, the construction industry is putting both Hoosiers and federal dollars to work. When federal funds are used productively on projects like building roadways or intersections, other commercial opportunities are not far behind. As construction employment continues to rise, the whole state begin to see its positive impact.