Opinion: The link between construction, economic development

Megan Herzog

Close your eyes and imagine an image of economic development. What did you see? Many people will imagine a community project like Renew Jordan Creek, a new business like the Amazon distribution center or a project like widening the Interstate 44 corridor to three lanes in Springfield. What do these images have in common? Construction.

According to the Missouri Economic Research and Information Center’s long-term employment projections, 2020-30, all industries are projected to increase by 7.3% in that span. But construction is projected to increase above the overall average, at 10.6%, and the subcategories of building construction and heavy/civil engineering construction are projected to increase by 11.7% and 12.6%, respectively. If you ask someone who hasn’t visited Springfield in recent years to comment on what is different in the community when they return, a significant response will be the growth and upgrades – all due to construction projects.

Buildings are one large area of construction including the commonly used term vertical construction – any type of building from the ground up, including residential projects.

Residential developments are important for our community to keep up with the population growth. Homes and other forms of housing are important for attracting new employees in a market with low unemployment rates.

Commercial developments are always consistent with economic development and our overall economy. When businesses grow, new buildings or spaces are needed to accommodate the additional employees or required floor space for retail or storage. Many business owners will decrease the size of projects or cancel projects altogether during a time of uncertainty or economic downturn; however, businesses will often still update facilities as needed.

Civil construction is another type of construction covering design, construction and maintenance of infrastructure, including roads, bridges and utilities. In easy-to-remember terms, civil construction includes the ground and below, as well as transportation resources, such as bridges.

Many cities and states have taxes to gather funds specifically for civil construction projects because of the importance infrastructure has on our communities. It is paramount to update our bridges and roads for our own transportation and safety, as well as to ensure we can receive services and goods in a timely manner. Anyone who has had a nearby bridge or main road shut down until repairs can be made understands the significance of staying on top of maintenance for both safety of drivers, and traffic flow of the area. Accessibility and walkability have been considered important focuses for our community, which also include civil construction projects in the form of sidewalks and greenway trails.

Other types of infrastructure projects assist with traffic flow to help efficiency with commutes and safety while driving. Engineers are trained to look at the impacts a new construction project could have on traffic in the area and make improvements to accommodate.

One large development can bring utilities to an area and allow future development along the same corridor. Whether a private investment, or part of a master plan by the public entity involved, the dollars invested into infrastructure – especially for a commercial development – will multiply financially by bringing in both property tax and sales tax dollars from new developments.

The multiplier effect of construction investments also impacts our local economy during the construction phase. When utilizing local contractors, the dollars spent are injected back into the economy by families and business owners. When utilizing contractors from out of town, the economy still receives a boost in the form of hotels, restaurants and shopping.

Investing in all types of construction impacts our local economy significantly. Infrastructure projects improve our daily commutes and the walkability of our community. The increased level of walkability also can impact the health of a community and the safety of an area. Residential projects assist with our housing supply to recruit job seekers. Commercial project investments multiply both during the projects and after developments are complete. Construction projects also contribute to quality of place initiatives by developing areas of the community with a master plan such as the city of Springfield’s Forward SGF.

Megan Herzog is executive director of the Springfield Contractors Association, a member of the Salute to Design & Construction Council. She can be reached at megan@springfieldcontractors.org.