POSTELECTION SURGE: OPPORTUNITIES UNLOCKED Conversely, the period following an election often witnesses a surge in construction activity. Once the political landscape becomes clearer, pent- up demand and deferred projects are typically released, leading to an increase in construction spending. This increase in construction spending is particularly noticeable when the election results are perceived as favorable for business and economic growth. For example, in December 2016, total construction spending in the U.S. reached $1.181 trillion, a significant rise from previous months and years. According to the Federal Reserve Economic Data, this increase was driven by heightened confidence in the economic policies anticipated from the incoming Trump administration, which included promises of deregulation
societal and economic factors must be considered in an investment strategy.
shifts toward fiscal conservatism can lead to tightened budgets for public construction projects, impacting the overall spending in the sector. As evident in the data from the 2012 and 2016 election cycles, under relatively ordinary social and economic conditions, construction spending can be predicted to a degree. The data from the 2008 and 2020 election cycles tell a different story, however. Developers and industry stakeholders can make decisions based on historical trends, but every investment is a roll of the dice. You never know when a global pandemic or an international economic crisis will unfold. The data from these election cycles vary from the others due to the 2008 housing crisis and the COVID-19 pandemic. Construction spending saw a significant downturn in the spring and summer of 2020 after the pandemic started. By the first few months of 2021, contractors began replenishing their backlog of projects that had previously been postponed. The construction sector never truly recovered until well into 2022. The data from this election cycle, as mentioned previously, must be taken with a grain of salt. Construction spending before the 2008 election cycle was already on a downturn from the Great Recession. The housing bubble began to burst in 2007, which led to a steep decline in housing prices and a subsequent slowdown in residential construction. After the election, the credit crunch severely restricted access to financing for both residential and commercial construction projects. As banks tightened their lending standards, many ongoing and planned projects were delayed or canceled. These individual events serve as a reminder for developers that even with some of the most reliable data, external
HAMMERING IT OUT Election years bring a complex interplay of uncertainty and opportunity for the construction industry. Historical trends indicate that although preelection periods may experience a slowdown in construction activity due to political uncertainty, postelection periods often witness a surge as clarity returns to the market. The construction economic outlook during election years is shaped by various factors, including policy proposals, regulatory changes, fiscal policies, and overall economic confidence. Interpreting this data and basing investment decisions on these trends is a worthwhile strategy, but developers must proceed with caution as external social and economic events like a pandemic or financial crisis may offset anticipated construction spending.
and infrastructure investment. Similarly, following the 2008
election, the Obama administration implemented the American Recovery and Reinvestment Act (ARRA), which significantly boosted the construction sector through increased infrastructure spending and economic stimulus. The data shows an uptick in construction projects can almost always be expected during the postelection period; however, the type of projects that will see the most spending is highly dependent on the candidate’s campaign promises. Policy-driven fluctuations are evident in various election cycles. The Obama administration’s focus on infrastructure development led to significant federal investments in construction projects. The Trump administration’s emphasis on deregulation and tax reforms created a favorable environment for private-sector construction. In contrast,
TAYLOR MILLER
Taylor Miller is a project specialist and marketing coordinator for Owner Builder Advisors, where he helps developers and owners navigate the construction process. He has been actively involved in the construction and inspection industries since 2016. He also manages marketing campaigns, social media, and document generation/
compilation for both formal and informal application processes.
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