War—A Market Boon or Bust?

The uncertainty in the weeks preceding the war in Iraq was reflected in the stock market. Today, that uncertainty of its start has vanished, and the question now is when the war will end. While no one knows the answer, the Portland Cement Assn. (PCA) is projecting the economic impacts of what a shorter vs.

04/01/2003


The uncertainty in the weeks preceding the war in Iraq was reflected in the stock market.

Today, that uncertainty of its start has vanished, and the question now is when the war will end. While no one knows the answer, the Portland Cement Assn. (PCA) is projecting the economic impacts of what a shorter vs. longer conflict may do to the U.S. construction outlook.

In its quick war scenario, the association predicts stronger economic recovery may occur as early as May, opposed to summer's end. This, of course, is predicated on the notion that fighting will be over in a matter of weeks, with low casualties and no complicating issues, such as hostilities between Turkey and Iraqi Kurds.

Even with this rosy forecast, PCA says low economic activity is still to be expected, with consumers staying at home during wartime. When the fighting stops, PCA predicts a month-long transition in which consumers will assess their finances before spending again. This should trigger an improvement in manufacturing activity. As uncertainty about the economy dwindles, investors will be more eager to put their money into the market, hiring should start again, and jobs should be created on a more than 100,000-per-month basis.

However, PCA notes its report does not necessarily indicate growth in construction spending. The key areas of nonresidential activity, it says, require long lag times between an upswing in economic activity and an increase in construction activity. Retail construction, however, should increase due to shorter lag times, and industrial construction may also increase slightly. Public construction is expected to stay the same. Overall, nonresidential construction will decline, and residential construction will remain weak. The long-term outlook is better, anticipating that the economic growth of 2003 will prompt a stronger recovery for these markets in 2004.

PCA's second scenario paints a darker picture. It assumes the American public will see military casualty rates higher than acceptable, triggering a consumer-led recession. This spending downturn will slow investment and manufacturing spending. This scenario could prompt a recession that requires a full year for the economy to return to where it's at today.





No comments
Consulting-Specifying Engineer's Product of the Year (POY) contest is the premier award for new products in the HVAC, fire, electrical, and...
Consulting-Specifying Engineer magazine is dedicated to encouraging and recognizing the most talented young individuals...
The MEP Giants program lists the top mechanical, electrical, plumbing, and fire protection engineering firms in the United States.
integrated building networks, NFPA 99, recover waste heat, chilled water systems, Internet of Things, BAS controls
40 Under 40; Performance-based design; Clean agent fire suppression; NFPA 92; Future of commissioning; Successful project management principles
BIM coordination; MEP projects; NFPA 13; Data center Q&A; Networked lighting controls; 2017 Product of the Year finalists
Transformers; Electrical system design; Selecting and sizing transformers; Grounded and ungrounded system design, Paralleling generator systems
Commissioning electrical systems; Designing emergency and standby generator systems; VFDs in high-performance buildings
Tying a microgrid to the smart grid; Paralleling generator systems; Previewing NEC 2017 changes
As brand protection manager for Eaton’s Electrical Sector, Tom Grace oversees counterfeit awareness...
Amara Rozgus is chief editor and content manager of Consulting-Specifier Engineer magazine.
IEEE power industry experts bring their combined experience in the electrical power industry...
Michael Heinsdorf, P.E., LEED AP, CDT is an Engineering Specification Writer at ARCOM MasterSpec.
Automation Engineer; Wood Group
System Integrator; Cross Integrated Systems Group
Fire & Life Safety Engineer; Technip USA Inc.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me