MEREDA conference highlights 'worker gap'
The Maine Real Estate and Development Association's bi-annual economic indicator measuring the health of Maine's real estate sector, The MEREDA Index, shows a significant "worker gap" that is driving up the cost and increasing the timeline of construction projects, according to a release about the index.
Unveiled at Thursday's sold-out annual MEREDA forecast conference, the index showed strong growth in the residential construction sector.
"Overall, The MEREDA Index has grown in the last years, though we are seeing the first plateau since the post-2007 recovery," Paul Peck, MEREDA president, a real estate developer and an attorney at Drummond & Drummond, said in a statement. "The second quarter of 2016 saw us reach the highest level in 10 years, led by a 10% growth in the residential component."
All told, The MEREDA Index, which covers the middle two quarters of 2016, came in at 93.
The second quarter of 2016 saw The MEREDA Index reach its highest level since 2006, led by a 10% growth in the residential component. But the second quarter's gains were not sustained into the third quarter, and at the end of the third quarter the index was just below its highest level since 2006.
The third quarter drop occurred primarily in the residential sector but also in the commercial sector. Over the past six months, the index grew 1.2% and over the year by 0.9%. Overall, the index indicates that recovery from the real estate recession continued, but slowed over the past year.
"The gains of the second quarter of 2016 were not sustained into the third quarter, with a 4% drop relative the second quarter," said economist Charles Colgan of the University of Southern Maine, who compiled the report for MEREDA.
Tackling the 'worker gap'
The lack of qualified candidates available to fill electrician, plumbing and other subcontractor positions that might be driving up the cost and increasing the timeline of construction has spurred MEREDA to launch a subcommittee with the Associated General Contractors of Maine to address the worker gap.
"The worker gap issue must be address if Maine is to benefit from continued economic investment, an expanded tax base in our neighborhoods and communities and a robust tourism economy," Peck said.
MEREDA's annual forecast conference featured more than half a dozen forecasts of future market activity by property type and geography, from top experts in the following categories: Maine's vacation and hospitality industry; southern Maine industrial, office, retail and residential; plus specific forecasts for the midcoast, Bangor area and central Maine markets respectively.
The new edition of The MEREDA Index was underwritten by Eaton Peabody, with support from CBRE | The Boulos Company, Wright-Ryan Construction and The Press Hotel.