Drive around the Atlanta area and you are bound to see new
construction – both multifamily and single-family residences continue to spring
up all over the metro area, as they are in other parts of the state, such as
the Savannah area.
Despite these visible signs of improvement, construction
employment continues to lag behind the private sector in general.
In 2021, average annual employment in Georgia’s private
sector grew by almost 4.9%, while construction employment rose by only 2%.
Residential construction keeping up construction employment
Much of the disparity lies with the increase of residential construction
versus nonresidential building and heavy and civil engineering construction.
Between 2020 and 2021, employment in residential
construction increased by 5.4%, while nonresidential building construction rose
by 1.5%, and employment in heavy and civil engineering construction actually
declined 3.8%.
Compared to February 2020 (pre-pandemic), construction
employment through April is ahead by 3,165 workers, with building construction
employment up by 1,743 and specialty trades contractors’ employment increasing
by 4,148.
Heavy and civil engineering construction
What is heavy and civil engineering construction? Think water
and sewers, pipeline, and power and communication systems, not to mention roads
and bridges, and you have a pretty good idea of the types of construction that
fall into this category.
Employment in heavy and civil engineering construction is actually
down by -2,726 compared to its pre-pandemic levels.
Imbalances will lead to problems
The imbalances in the recovery of the construction sector point
to trends as well as future problems.
The trend in constructing residential versus nonresidential buildings
can be partly explained by the work-from-home trend as fewer workers on-site
means less need for commercial office space.
Unfortunately, the trend in residential construction without
the corresponding increase in water, sewer, and other types of heavy
construction, such as roads, means that residents of these newly occupied
family dwellings will find themselves with inadequate infrastructure to support
their living.
As a result, more crowded roads, decaying bridges, inadequate
water systems, etc., look to frustrate residents.
Since most heavy construction is publicly funded through
taxes, the solution depends on the willingness of taxpayers to increase taxes
on themselves. Short of increased taxes to fund public improvements, Georgians will
find themselves complaining about the situation while unwilling to take the
necessary steps towards improving it.
