Look around and you’ll see that construction is everywhere in Southwest Washington!
Studies show that construction payroll in Washington State generated nearly $38 billion in a three-year period. As of November 2017, construction employed 205,000 people in the state. Studies also report that for every $1 invested in construction in Washington, an additional $1.97 of added sales are generated. The multiplier effect brings the investment in our community well into the billions. The region, which includes Washington, Oregon, and Idaho, is noted for being one of the top performers in the United States. Given this, the state of construction is strong. However, we have many challenges in our future that requires action now.
With construction being one of the most important industries in Washington State, a sudden change in the industry can create a lasting impact on the entire state. I have learned through top regional economists that we have passed through the 103rd month of economic growth. The longest trend recorded in U.S. history is 129 months. In other words, we are approximately two years away from a potential bust in the economy or a record-breaking streak of growth.
June 2018 marks the 10th year of growth in the economy since the Great Recession. While the forecast seems positive, it is no time to let your guard down.
- We know it is a tight labor market. It’s hard to find and retain the skilled workers to fill the jobs that compose a construction business. This results in employees having the upper-hand and gaining momentum on higher wages. As a business owner, this means more overhead and higher costs related to running your business. Do you offer a competitive benefit package that will help your business attract and retain dedicated employees?
- Inflation is not rising at the rate that economists naturally expect when all other economic elements are taken into consideration. Though, business owners should be cautious of the rising commodity prices such as the materials required for construction projects. These prices could mean a much higher cost in running your business.
- Identify other risks specific to your business: Are more than half your employees nearing retirement age? Have you diversified the type of projects your business works on? In other words, what steps are you taking today to ensure continued prosperity?
The state of construction is strong, especially in our region. However, that shouldn't deter you from insulating your business from future dips in the economy. Now is the time to invest in the people, technology, and resources to generate a return-on-investment during more dire times. It’s time to be proactive rather than reactive. The threat of downturn is forever looming and you need to ensure that you never forget to position your business to survive economic hardships.