How to Ensure a Successful Remodel Project in 2022/2023
Homeowners and remodeling contractors alike have found themselves in the “perfect storm” as market dynamics for construction and more specifically, remodeling, have changed in recent years. Let’s investigate the causes and effects of this economic phenomenon and how you can develop realistic expectations for a remodel project.
The National Macro and Micro Economic Data
According to data published by the World Bank, the U.S. economy experienced positive gross domestic product (GDP) growth between 2010 and 2019. In 2020, GDP was in negative territory due to a variety of factors, but primarily the COVID-19 pandemic (which will be addressed in more detail later).
Many economists consider the construction industry to be the steam engine of the U.S. economy; its contribution to the GDP has been on an upward trajectory between 2012 and 2020 and is expected to continue through at least 2022. This data is supported by national construction-related expenditures, which increased from $267 billion in 2015 to $337 billion in 2020 and are expected to be $351 billion and $400 billion in 2021 and 2022, respectively, according to the Joint Center for Housing Studies of Harvard University.
As GDP trended in positive territory, the national unemployment rate steadily fell from 9.63 percent in 2010 to 3.67 percent in 2019 before catapulting up to 8.31 percent in 2020. The construction industry unemployment rate, which has traditionally been higher than overall unemployment rates, fell from 27 percent in February 2010 to 3.2 percent in September 2019. Construction unemployment spiked to 16.6 percent in April 2020 as shelter-in-place mandates went into effect and many segments of the construction industry temporarily halted operations. According to the Bureau of Labor Statistics, construction unemployment was down to 4 percent as of October 2021.
Regardless of the perceived low unemployment rate in the construction industry, there are currently an estimated 321,000 unfilled construction jobs in the United States. That’s why news headlines harken the severe “construction labor shortage,” which revealed itself following the recovery from the last recession.