2007 Construction & Remodeling Industry Outlook
Monday, May 07, 2007
Many of the members in our network have been reporting a big drop in local remodeling, repair and building jobs in their area. At Construction Deal.com, we receive and review many economic reports on the industry and we want to provide you with an updated outlook for the rest of 2007. The Good News
Overall, the economy is moving along nicely. The job market is steady. Interest rates are holding. The stock market continues to expand. Excluding energy prices, inflation is not currently a problem. And the Federal Reserve appears to have no intention of raising interest rates any time soon.
Many of our contractors are saying that people are starting to plan new building and remodeling projects again. Fears of a bursting housing bubble and lower housing prices kept many in the dark but they are coming out to test the waters again.
The Bad News
Recent reports show jobless claims rising. Salary growth is stagnant. Job growth fell to its lowest level in 2 years. Consumer spending is finally starting to cool. Most of the job losses have come from construction jobs and retail. And oil prices are still very high.
What Does It Mean?
- Consumer confidence and the nation's housing market could cause problems. Homeowners and business owners may not be willing to take on expensive remodeling or repair projects if they fear a dip in the economy.
- Housing prices have not crashed but potential buyers want and will soon demand that prices come down.
- If home prices drop, people will have less equity. Less equity means less money to spend on improvement projects. They can't borrow against equity that has dried up. They may be worried it will cause a chain reaction bringing down the rest of the economy.
- If mortgage and borrowing rates do not drop, fewer people will be buying new homes and may hesitate to remodel current homes. Many economists are reporting that our new Fed chairman is making a mistake by not cutting interest rates. A minority are saying that his inaction on rate cuts may send up into a recession later this year.
- One thing that will not help the housing market: the disappearance of sub prime loans. These days, mortgage companies also fear 100% financing on house purchases. With fewer people able to buy a house, the supply of houses will continue to stay high.
- Foreclosure rates are skyrocketing. Some cities and counties have foreclosure rates that are up 3o% to 50% over previous years. Foreclosures increase the amount of available housing and the reports of these foreclosures keep consumer confidence bogged down.
For 2007, it could be a slow year for all sectors of the construction industry. It might mean waiting for confidence to return, which will happen if housing prices only drop a small amount throughout the country. We'll try to keep you updated as new reports come in.
If you are a member of the Construction Deal.com network, we'll continue to bring you as many jobs as we can to help grow your business. We have added 40 new residential categories and over 80 commercial construction, remodeling, and repair categories. Advertising and marketing has begun in earnest on our new commercial categories so you should see an increase in available jobs.
If you're not a member yet - consider registering for free. You can review local commercial and residential job leads in your area. If you see a good history of past and present opportunities, feel free to become a member! If not, continue to monitor your account with us for as long as you would like until more new jobs come up in your area. Give us a call if you have any questions at 866-663-4711!
Labels: Construction News, Construction Trends
