(As published by AJC)

Atlanta Journal Constitution: Building plays smaller role in Georgia economy
By Michael Kanell, August 11, 2015

Private construction’s contribution to Georgia’s economy remains only about half of what it was prior to the housing and real estate bust, according to an industry group.

The sector’s share of the state’s overall economy dropped 43 percent – from 6 percent to 3.4 percent, over the past decade, the analysis by Associated Builders and Contractors shows.

“Historically, construction has always been an important factor in the economy,” economist Bernard Markstein, a consultant to the group, said in an interview. “But you are just not seeing as much demand in the overall economy for it.”

The sector workforce peaked in early 2007 and – despite a modest rebound – is still 30 percent below that level, according to the Bureau of Labor Statistics.

Even before the housing bubble of the last decade, the sector had an outsized impact. In 1998, when the economy was significantly smaller than it is today, construction accounted for 7.1 percent of the state economy.

Those figures do not include the ripple effect of construction – the purchases of new equipment, furniture and appliances for homes and offices.

In times of a healthy economy, construction typically represents 5.5 to 6 percent of the economy, Markstein said.

A recent pick-up in homebuilding and a spate of big-ticket projects around Atlanta, including a new stadium for the Falcons and a new baseball park for the Braves, have given the sector a boost.

The ABC report, which includes 2014 data, does not include publicly funded projects, like highways.

Nationally, the role of construction in the economy fell from a high of 6.17 percent to 3.66 percent last year, according to the industry group study. The state with the largest share last year was North Dakota, where construction accounted for 5.9 percent of the economy amid a boom in oil production.

Georgia ranked 35th among states, down from 12th in 1998.
Construction’s share of the Georgia economy
1998: 7.1 percent
2005: 6 percent
2015: 3.4 percent
source: Associated Builders and Contractors report