Economist: Energy investment helping Pa.
Associated Builders and Contractors Inc.'s Chief Economist Anirban Basu gave an analysis of the global, national and state economies with a 2013 projection for 2 percent growth in the U.S. and good prospects for states such as Pennsylvania that are investing in energy.
Nearly all states have recovering and growing economies, but those doing really well — North Dakota, Texas and Alaska — are invested heavily in oil and energy sectors, he said.
"One of the nice things about (Pennsylvania) is that it's participating in the energy economy," Basu said, talking about the state's development of its natural-gas resources in the Marcellus Shale.
Production might be slower at the moment due to lower prices, but energy will continue to be crucial to economic development in coming years, he said.
Basu spoke to the audience of construction companies gathered for Lancaster County-based ABC Keystone chapter's economic forecast breakfast at the Best Western Premier Central Hotel and Conference Center in Lower Paxton Township, Dauphin County.
"Things are in fact getting better," Basu said. "But there's still mixed data, don't get me wrong."
There was strong evidence from 2012 in the financial markets that the U.S. will continue its growth, even if at a slow pace, he said. The New York Stock Exchange had 7.3 percent growth, while the Nasdaq saw 15.9 percent last year, despite debt ceiling and "fiscal cliff" debates in Congress, he said.
"Washington hasn't managed its finances particularly well, but it hasn't kept the financial sectors from performing," Basu said.
A number of other sectors are beginning to wake from their slumber as well, but construction isn't there yet, he said. In 2012, construction added about 100,000 jobs, but most of those came in the last part of the year and are likely driven by recovery from Hurricane Sandy.
"It's not clear to me there is strong job growth," he said.
In Pennsylvania, construction employment dropped 7.7 percent, but the situation could improve in 2013 if national numbers are evidence, Basu said. ABC members are reporting backlogs are on the rise and some commercial construction sectors are performing well, including:
• Lodging, 16.1 percent growth
• Transportation, 13.9 percent
• Energy, 11.2 percent
• Office, 9.1 percent
• Commercial, 3.5 percent
One indicator could be consumer confidence, which has been growing, Basu said. Anecdotally, walk into any sit-down restaurant and see how much busier it is than in recent years, he said.
That could bode well for 2013 if some of that confidence rubs off on construction markets, he said.
"It takes a lot of confidence to move forward with construction projects," Basu said.