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Commercial Boom Softens Housing Bust
Francisco Flores works at Smoketown Plaza in Woodbridge, where construction workers with the specialized skills needed for commercial buildings find themselves in demand.
(Photos By Carol Guzy -- The Washington Post)
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Add it all up and the increase in non-residential work more than offset the 6.7 percent decline in home building over the same period, so the value of all construction rose a net 2.9 percent.
These figures have heartened many analysts, who predict the housing slump will continue to dampen economic growth through next year but will not lead to a recession.
"The expected further weakening in housing activity is likely to be largely offset by business capital spending," Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond, said in a speech last month.
More pessimistic analysts say it is too soon to know how far or for how long the housing market will slide, or how much it might hurt the rest of the economy. They note that total construction spending fell 0.3 percent from August to September, a trend that would be worrisome if it continued. But so far, they agree, the economy is holding up pretty well.
"The problems in housing have not bled into the rest of the job market, at least not yet," said Mark Zandi, chief economist at Moody's Economy.com.
On the contrary, job growth has been so strong that the national unemployment rate fell in October to 4.4 percent, the lowest in more than five years. The Washington area job market is even tighter, with a jobless rate of 3 percent in September, the latest month for which figures are available.
And "if you're any kind of construction worker in the Washington area, it's not hard to find work," said Gene Pinder, business manager for the Baltimore-Washington Laborers' District Council, which represents 7,000 laborers, the workers who pour concrete and asphalt, prepare sites and handle building materials for both residential and non-residential construction projects. "The industry is still red-hot."
At general contractor R.W. Murray, for example, "we never stop hiring," Fairchild said. "There's just a shortage in our industry, nationally" of skilled workers.
Lacker, the Richmond Fed President, whose territory includes metropolitan Washington, predicted that "further increases in non-residential construction will allow many workers to simply change construction jobs rather than become unemployed."
That is at least partly true, builders said. Some, but not all, residential construction workers can shift to non-residential projects, which typically pay more and require higher skill levels. Among those who can make the change are project managers, site supervisors, accountants and other office workers involved in design, engineering, legal and financial work.
For example, R.W. Murray's site supervisor on the Arby's project, Scott Merryman, previously worked for a home-building company.
But much of the work in non-residential construction is more specialized and more complicated than in housing. Such tasks include electrical wiring, installing heating and air conditioning systems, operating multi-story tower cranes and erecting metal frames.
