How Construction Activity Betters Our Economy

constructionBy Charles Ferlisi, Director of Development & Construction Consulting at Southpace Properties, Inc.

I recently came across an article in the Birmingham Business Journal by Jay Reed, President of the Associated Builders and Contractors of Alabama. His piece was titled “Why Construction Matters in Alabama.” As Director of Development and Construction Consulting at Southpace, I was curious to read his points of why he felt construction mattered so much in our state. Turns out, I couldn’t agree more with what he had to say.


According to Jay’s article, “A study recently conducted by the Associated Builders and Contractors of Alabama identified that commercial construction and the industries that feed it stimulated $9.349 billion of business in our state, and generated 150,000 full-time jobs in 2010 alone.”

The numbers in construction usually show the surface money, such as expenditures for goods, labor and services, permit fees and taxes. But you have to look further to realize these same numbers would illustrate that if individuals and companies weren’t making money, they wouldn’t be able to put down payments and equity into homes or buildings. Moreover, lenders won’t lend if you can’t prove that you can pay them back.

More construction activity means that more people have jobs and are making money.  Therefore, we eventually see growth in the wants and needs for new buildings, ultimately indicating a prospering economy.

Alabama, and Birmingham in particular, have some very large and successful construction companies. Relative to State Domestic Product, we have more construction personnel than many other states. This greatly contributes to our state’s financial welfare.

As much as any other indicator, commercial, industrial and residential construction are strong barometers of economic activity. If the economy is unstable or just not growing, there’s little interest or need for additional building space. The same being true if it were the other way around.

Therefore, the more activity we continue to see within commercial, residential and industrial construction, the more our economy will proceed to grow. And that’s why construction matters.

Southpace Properties, Inc. is Alabama’s largest independent commercial real estate firm. At Southpace, we add value to the use and ownership of commercial real estate through services such as office, retail, land, warehouse and industrial sales and leasing, tenant and landlord representation, development, consulting, investment sales, property management and construction management. With 13 CCIM designees, Southpace has the highest number of CCIM accredited brokers in the Southeast.

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