A wave of change within the construction industry is coming in 2020! News of a U.S. housing market boom is starting and the United States-Mexico-Canada Agreement (U.S.M.C.A) is set to take effect in 2020. Furthermore, a new infrastructure plan is in the process of being solidified by the U.S. government. Let’s take a closer look at these pivotal changes coming to the construction industry.
The housing market is bringing good news for those working in the construction industry. According to the U.S. Bureau of Labor Statistics, interest rates have not been this low since 1969. This means that consumers will and are buying houses at a high rate. The more people buy houses, the more houses need to be built. The market is already starting to feel the pressure of a housing shortage.
The National Association of Home Builders (NAHB), takes a monthly survey from its members to evaluate the single-family housing market. According to their latest report from January 16th, the market currently has a rating of 75. While it has dropped one point since December of 2019, the January rating is still 17 points higher than this time last year.
Overall, this information bodes very well for contractors. Since the interest rate and unemployment numbers show no signs of increasing, it is safe to assume that 2020 will bring a housing market boom.
Since 2018, President Trump has been discussing the need to bolster the U.S. infrastructure. In April of 2019, President Trump and leading Democratic lawmakers agreed to pursue an infrastructure plan.
On January 29th, Democratic lawmakers put forward a $760 billion infrastructure plan. Though this budget is significantly less than the $2 billion plan previously suggested by President Trump, it is encouraging for the construction industry to see progress on this front.
In the Washington Post article that outlined the Democrats’ infrastructure plan, it was stated that neither party had a plan for the payment for this proposal. However, a Transportation Department official said that “The secretary and the administration have said multiple times that nothing is off the table when it comes to paying for infrastructure.” He continued, “This proposal does not appear to have been drafted in a bipartisan fashion.”
When an infrastructure plan is officially underway, it will create jobs and bolster revenue within the construction industry.
The U.S.M.C.A. is one of the most exciting deals passed in decades. Not only did this deal pass, but it was largely drafted in a bipartisan manner. The House of Representatives passed it by a 384 to 41 vote, and the Senate approved it by an 89 to 10 vote. Here are a few implications of the U.S.M.C.A.
Of course, the implications of the U.S.M.C.A are much further reaching than just the construction industry. Nevertheless, the agreement still succeeds in making a huge impact on the industry. Greg Ugalde, Chairman of the National Association of Home Builders said, “This is a win for American jobs and a win for housing affordability.” Brian P. McGuire, AED’s President, and CEO also strongly supported the U.S.M.C.A. Check out our January 7th blog to read about how he believes the bill will affect the construction industry.
In an election year, the U.S. and global markets could be somewhat tumultuous. However, the Prime Minister of Canada, the President of Mexico, and the President of the United States have all signed the U.S.M.C.A which should lend some stability to the market.