Construction manpower shortages rising
A new construction mini-boom has arisen, demanding the job capabilities of thousands.
While labor force participation has touched a low point last reached in the 1960s (62%), it’s less well-known that “increased jobs going begging” have reached the highest level since the end of the Great Recession six years ago.
Although ongoing talent-demanding openings have required specific skills to match the needs of America’s expanding technological evolution, recently reaching close to the 10 million mark, the broad construction sector has now also opened up big time.
While basic contracting skills — such as plumbing, heating and cooling installation; plastering; and painting — were on the sidelines following the construction reversal in the wake of the recession, a new construction mini-boom has arisen, demanding the job capabilities of thousands.
Surprisingly, single-family home construction is on its way to the previously unexpected million mark this year, driven by population growth and a discernible shift from leasing and renting. This has seen multiple cost increases in the past five years. It also has been abetted by a pickup of foreign investment in selected geographic areas, increasing the market for second homes, as well as for long-term investment purposes.
While the so-called Millennials and GenXers are still wary of “getting stuck” with a price-decreasing home burden, this has been alleviated by government-backed Fannie Mae and Freddie Mac, who have sanctioned down payments as low as 3%, while historically low mortgage rates continue to attract new, job-entry-age participants.
Additionally, an accelerating surge in repair and maintenance seems to have developed into a roaring subsector. This has happened as long-term home improvements, as well as upkeep, have motivated middle- and older-aged owners who want to maintain their property value, in addition to taking advantage of solar power, fall-back power generation and other updating opportunities.
The increasing shortage of manpower to fill these slots has as yet not hampered the construction sector as a whole. However, the simultaneity of residential, commercial and industrial construction, due to reach new volume levels in 2016, could make critical job shortages an increasing impediment as the new year unfolds.
Mining sector troubles
Although the mining subsector of America’s lagging overall manufacturing segment of its world-leading gross domestic product has been relatively submerged (no pun intended) statistic-wise, its endangerment is now forthcoming in media economic concerns.
Since the United States is among the world’s foremost mining activities covering all commodity excavation, including iron ore, copper, zinc, nickel, aluminum, palladium, gold and silver, the combination of the rising dollar and the rest of the world’s increasingly lower cost competition is putting the squeeze on the profitability emanating from these ventures.
While the U.S. public has been made aware of oil and coal, both of which are subject to “climatological antagonism,” the hundreds of billions of dollars worth of excavating such components, adding to America’s overall revenue generation, are increasingly assaulted by diminishing cost/profit factors on the one hand, while attempting to fend off the U.S. Environmental Protection Agency with the other.
Most of the increasing worries relating to the overall product generation arena concern itself with the inestimable amount of basic commodities unearthed among the 50 states and the various territories controlled by the United States, the thousands of corporations and billions of dollars needed to get these units out of the ground. These have to be financed by government and private loans; added to this requirement is the employment of hundreds of thousands of workers needed to bring this gigantic payload to the surface.
While the factors agitating against the profitable finalization of these mining activities could be complicated by such cost-heavy activities no longer estimated to be profitable, a lengthy extension of the current squeeze could become a further deterrent to the overall aspects of America’s manufacturing and production base. This is critical to a gross domestic product forward movement, as 2016 attempts to have productive objectives for the year. Any deterrent therefrom could endanger any chance for substantial GDP improvement.
Last summer’s official U.S. Census Bureau population figures indicated a recent downward trend in total U.S. population growth during the latter part of the 2005-2015 decade. While running short of the 325 million people prediction (it came in at 321.4 million), the world’s third most populous nation (after China and India) is slowing its current growth rate.
But of greatest significance is the shift of America’s overall geographical population today and in the coming decades. This indicates an accelerated shift from the Northeast and Midwest to the Southeast and Southwest. This evolution is emphasized by the fact that, for the first time in a decade, Florida outstripped California in population by adding more than 370,000 people last year, which put it in a solid third position after New York and Texas.
Almost a third of Florida’s incoming residents are Cubans, which is likely to increase due to, not in spite of, the waning of bi-national relations.
While California, New York and Illinois provide Democrats with a solid backbone in presidential elections, the upcoming 2020 Census Bureau 10-year population reevaluation may shift Electoral College votes to the GOP. Even though the “sure-fire” Democrat Northeast and parts of the Midwest will remain in the Democratic camp, they are destined to lose electoral votes to the GOP in the Southeast and Southwest.
Despite the belief that the overwhelming majority of Hispanic minorities and women, in general, tend to lean toward the Democrats, the hostility of the current administration toward traditional energy development (coal, oil and natural gas), and its employment-hindering EPA regulations has instigated political pessimism. This is especially true of West Virginia, Virginia and Eastern Kentucky, where coal mine production has been devastated, even when directed toward exports.
In addition, a drop in the postrecession fertility levels reduced the potential U.S. population growth by three million during the past five-year period. Seven states shrank over the year 2015 — Illinois, West Virginia, Connecticut, Mississippi, Maine, Vermont and New Mexico — continuing the ongoing shift from the Midwest and Northeast to the South and West.
The millions of new immigrants who showed a slight increase in the past year were primarily domiciled in the four states of California, New York, Texas and Florida. In California, which remains the most populous U.S. state with slightly more than 39 million people, the dominance of the continuing residence of Mexican immigrants is being increasingly replaced by Asians.
These include significant segments from China, Taiwan, India and the Phillippines. They far outnumber the registered 24,000 Mexican immigrants, who were permanently settled in California.
Record mergers, acquisitions
With 2015 representing a relatively disappointing humdrum gross domestic product achievement year, it may be surprising to note that mergers and acquisitions set a $4.7 trillion all-time record.
Among those cutting across such diversified sectors as health care, prescription drugs, insurance and industrial components, the largest and most prominent is the prospective merger of the United States’ (and the world’s) two largest chemical giants — Dow Chemical and DuPont. The companies are not only multibillion-dollar revenue generators, but both are recognized among the nation’s most positively identified brand names. It’s a well-deserved reputation, based on these two corporate powerhouses’ respect by America’s investment community and the U.S.’s buying population at large.
With this potential mega-star having come under the scrutiny of U.S. government investigators, assessing its unprecedented impact on competition and potential monopoly, it’s only the most prominent in a recent, unexpected trend among the nation’s industrial and commercial superstars. An analysis of reasons behind this record trend discloses the following:
- In an increasingly competitive environment, further complicated by federal regulations, increasing the cost of production, as well as the need of additional employment necessary to implement tightened government restrictions have made a merger desirable from an employment point of view.
- With higher commercial interest rates a near certainty in the foreseeable future, the ability to secure optimum additional debt made the timing of this move particularly appropriate.
- As future opportunities in the export of derivatives requiring the huge volumes of liquid natural gas, a major component of chemical industry products, presented themselves, the merger of DuPont and Dow appeared more complementary, rather than overlapping as a result of the unification.
- The obvious ability to cut back literally thousands of service personnel, which is particularly propitious at a time when wages are certain to rise, would allow the Dow/DuPont planners to maximize the service workforce, thereby greatly strengthening its domestic and export capabilities. It would solidify its U.S. production costs, with natural gas available at the lowest cost anywhere in the world.