Are we out of the woods yet? It depends who you ask, says Dr. Lee McPheters, research professor at Arizona State University, who told NSCA Business and Leadership Conference attendees our economy is improving, but too slowly for some to feel it.
Since the recession officially ended in July 2009, “we still have negativity that pervades,” despite the fact industrial production, the stock market, corporate profits and real GDP have all reached record highs since that time, says McPheters. So why is half the population saying the economy is getting worse when, in fact, the opposite is true?
“They look at the economy and think of what it ought to be and believe it doesn’t measure up,” says McPheters, noting the 18 quarters since the most recent recession ended have seen growth (2 percent) at about half the speed of the 18 months of the previous 10 recessions (4 percent).
“It’s not getting worse; it’s just not getting better very rapidly,” he says. “That creates the idea things are worse than they ought to be.”
In the integration space, 2013 “was a disappointing year,” says McPheters. Work in the education, government and public safety, healthcare, and house of worship markets were all down, with lodging and retail among the areas where growth was strongest.
Still, McPheters believes 2014 “should be the year 2013 should have been,” and offered a few ways that can happen:
- Businesses will start using some of their pent-up demand on equipment and hiring
- Banks will become more willing to lend
- Consumers will pay off their debts
- Spending will pick up
If all of these things happen, construction will become the growth driver for the continued turnaround, says McPheters.
That’s an important element since the construction industry as a whole has only seen about 15 to 18 percent of its jobs return since the recession ended, compared to about 90 percent for the economy as a whole, says McPheters.
NSCA executive director Chuck Wilson talks in the video below about where he thinks we stand:
With construction as a potential growth driver, 2014 should be the best recovery year since the most recent recession ended, says McPheters. The best news for integrators is there are now more jobs in healthcare than in manufacturing, largely as a result of an aging Baby Boomers generation.
McPheters believes a shift in how people think may also help the economy continue to move forward. Paying people according to their productivity instead of maintaining an economy where the top 1% of earners take in almost 25 percent of the money is imperative.
That means, he says, closing the technology and education gap, stemming the tide of sending jobs overseas, rethinking increasingly negative attitudes on unions and giving up some executive power.