For some time, I have asked myself (and others): “What was so great about the Great Recession? “This economic crisis has been considered by the International Monetary Fund (IMF) as the worst global recession since World War II. Its impact has been felt in almost every imaginable industry, and particularly in the construction industry. It continued its course. for 18 endlessly long months, between 2007 and 2009; the worst period occurred in mid-2009.

How did it affect the commercial construction industry and what has / will happen almost 5 years after the official “end” of the Great Recession?

What happened?

The construction industry is used to cyclical changes, but the Great Recession was not a typical recession or cyclical change. No sector of the construction industry was spared the harsh impact of the Great Recession; non-residential, commercial, industrial or civil and heavy engineering.

One aspect of the recession that is not often mentioned is that the cycle boom The construction industry was directly followed by the recession, leaving a large glut of residential and commercial real estate on the market.

As the recession deepened, homeowners defaulted, others were not buying houses as planned, and investors were extremely cautious about financing new construction projects.

2012-2013 was forecast to be a period of growth and non-residential construction activity was expected to continue its recovery. Once again, there were delays in the recovery, driven in part by the government and financial institutions:

• A seizure of the federal budget that results in a reduction in public spending.

• A federal government shutdown.

• Credit restrictions imposed on construction projects, mortgage loans, loans in general.

• Increase in long-term interest rates based on the expectation that the government will reduce its stimulus program.

These factors, and the extremely slow recovery of the world economy, undoubtedly had a direct and negative influence on the construction industry.

Entering 2015

So what is the state of commercial construction in 2014 and beyond? Recovery is happening, but not at an accelerated rate. Factors that (according to industry observers) influenced growth in 2014:

• Weather-related delays on projects at the beginning of the year.

• The continuing slowness of the institutional market and the reduction in construction spending projections.

• Financial institutions continued their restrictive lending practices.

Is there any good news? Yes! Let’s take a look at some of the more favorable changes in 2014 and some positive indicators in 2015:

• Some relaxation of credit restrictions; lending increased 4 percent in the second quarter of 2014, most related to the commercial real estate industry.

• Commercial construction projects are increasing rapidly in various regions of the US, particularly in Texas (Houston) and the southern region in general, and New York (Rochester and New York), Massachusetts (Boston) and Louisiana (New Orleans). ).

• Consumers are “cautiously optimistic” and spending has risen, as has the rise in jobs.

The commercial construction industry was and continues to be deeply affected by the Great Recession. But industry watchers, like consumers, are cautiously optimistic (with more emphasis on caution than optimism) that the industry is moving slowly and steadily.