It's entirely possible. However, I've lived through enough recessions to recognize the beginnings of one. Experience is one of the few perks of being old ...
This is a paper written by our government dealing with employment in the construction industry. Have a look.
http://www.bls.gov/opub/mlr/2006/10/art1full.pdf
The paper deals with construction employment vs general employment. I want to use the graphs they use in the report to make my point, not the article itself. It was the only place I could quickly find the correct numbers.
6% of all non farm jobs are construction. Most residential. The result of the current crisis in mortgages will mean that the mortgage market has to contract by 60% unless the government bails it out somehow. These are straight up numbers which no expert will argue. To date 147 mortgage companies have closed since January. Not Mortgage Brokers, these are mortgage lenders and comprise about 45% of the market. We are well on our way to hitting the 60% figure unless something is done soon.
We now have a 16 month supply of new housing at 2006 sales rates. At the new rate, that translates into roughly double the supply. So if no one builds another structure for 3 years, no one will notice.......or will they? If they stop construction they sure don't need 6% of the non farm work force, do they? On the other hand, if they stop building, you must think they'll keep all these employees?
And these numbers in the report are direct government employment numbers. What about the indirect consequences? How many Walmarts close? 7/11's go out of business, insurance agents, reat estate agents mortgage people, and on, and on..
There is trouble ahead
But there is more.
The very nature of the construction industry involves both large and small contractors. Large ones lay people off when things get slow, but small ones just go out of business. Since they are either self employed or 1099, they NEVER show up in unemployment numbers. They just disappear. Our economy could never absorb these kinds of numbers. This is why all those articles I posted the other day written by "experts" were published. There's no smoke an mirrors. The problem is in plain sight for anyone to see. As manufacturing disappeared, where do you think everyone got jobs? In the booming construction industry of course.
Myopic?.... Yep,
but the real question is...Now what?