America produces Buildings

When thinking about our economy and a potential rebound, many economists continue to portend that we need to restore some of the lost manufacturing jobs that have migrated overseas during the last 10 -15 years as it has become increasingly cheaper to produce our goods in other countries. Only 9% of America’s non-farming jobs are classified as manufacturing. This number has continued to dwindle and most of us recognize that it doesn’t make a lot of sense to falsely prop up a segment of our economy that is no longer economically viable.

After all, who really thinks we can manufacture furniture here (given the hourly wage requirements) and compete with the Chinese? If we still want to avoid purchasing products made overseas because we think they have unfair labor practices, etc., ask yourself how much more you would be willing to pay for that stroller if it were American made – double…. triple? I doubt it. Besides, the new global economy is creating a middle class in so many previously impoverished nations that is has to be uplifting to see people have the opportunity to better themselves after so many years of futility.

I mention all this for a reason. Step back and try to think about what we continue to produce in America that we each use everyday. Other than food, not much. But we do produce buildings. Be it schools, hospitals, offices, industrial plants,  houses, shopping centers, apartments, colleges, reaserch facilities or factories, America manufactures a huge amount of new buildings. More importantly, a very large percentage of the materials that go into those buildings (concrete, block, steel, lumber, drywall, bricks, siding, roofing, carpet, glass, cabinetry, etc.) are made in America. This is primarily due to the fact that most of the materials are too expensive to ship long distances, due to their weight.

When economists spout statistics about the construction industry they are not usually including the suppliers mentioned here. Some are included, but a large number are categorized as manufacturing jobs. If someone would properly assess the impact construction has on our overall economy I maintain it would be far greater than we realize. What about the small mom and pop landowners used to selling trees to the local sawmill to produce hardwood flooring and cabinet materials that are no longer needed? And think about the heavy equipment operators no longer working in the rock quarries. There is no demand for the stone aggregate that is used in asphalt, block, concrete, etc. Even sales of new oil filters are way down because construction vehicles go through filters much more frequently than ordinary vehicles. That does not show up as a “construction industry” statistic.

Another factor that is not accurately conveyed is the fact that most construction labor is done by self-employed people. These people are not in the unemployment lines because they are not technically unemployed, just underemployed. They may be doing small odd jobs making 30 to 40 percent of what they used to make, but they still don’t show up in the unemployment statistics.

If we want to spur our economy we must recognize that America doesn’t produce much anymore. However, we do produce buildings and most of the products that go into those buildings. I don’t expect any significant economic growth until construction improves.