Dino Tomasetti, JR Outlines Recent Job Surge in Construction Industry
The COVID-19 global pandemic halted life as we know it. Businesses were temporarily shut down, stay-at-home orders kept people from earning a living, and the fear of an invisible enemy gripped the collective American consciousness. Dino Tomasetti JR, president and CEO, Asset Realty & Construction Group, agrees there were moments of doom and gloom, but adds that the pandemic didn’t take into account the resilience of the human spirit and our determination to life, liberty and the pursuit of happiness. For many, this means working, making money, contributing to society, and supporting our families.
Despite human resolve, the labor market remains in a state of disarray with a high number of unemployment rates and slow recovery efforts. That was, of course, before the latest figures were announced, showing a significant drop in unemployment rates and 2.5 million jobs added. For the real estate development industry, this is good news as hundreds of thousands of workers flooded back to work in phase one plans, which included the construction sector.
In New York City, Mayor Bill de Blasio stated that construction is part of the city’s phase one economic opening allowing 32,000 city construction sites to reopen, putting thousands of people back to work. A step that many states are taking as well.
Tomasetti points out that as this is excellent news, the real estate tends to ebb and flow across different sectors of the market in an ever-changing landscape without consideration of events like the COVID-19 pandemic.
“Within certain geographical areas, sectors that were once experiencing strong growth have now stagnated somewhat,” said Tomasetti. “Today, many sectors are experiencing a combination of market saturation and political and legislative headwinds, although there are still great opportunities out there; it’s just become much more difficult to find them, especially in the age of COVID-19.”
Job creation within real estate development has been particularly challenging due to sectors of the marketplace that typically yield the highest level of job creation, (retail, hotel, and commercial space) are industries facing the most considerable decline.
“Politicians and lawmakers have tried to level the playing field by attempting to provide incentives, or by making the conditions less favorable for other land uses,” said Tomasetti. “A real estate developer’s decision to build a certain project or not is going to be numbers-driven. If a project does not pencil out, a developer will not move forward.”
Tomasetti points out that there is good news on the horizon as the U.S. Labor Department reports construction employment gained back more than half of April’s decline, recovering more than 400K jobs as building permits and spending climbed back up in many parts of the country. A majority of that growth – 325,000 jobs – occurred in specialty trade contractors being split evenly between the residential and commercial sectors, while construction job gains — 105,000 — were mainly in residential buildings.