CARLSBAD, Calif. The recovery of the residential
construction sector is creating a housing glut
which may not actually support wider economic growth, economist
Peter Morici told delegates at the Metals Service Center
Institutes Specialty Metals Division Conference March 21.
While the housing sector is recovering in the United States,
much of the spending is taking place in the existing home
market, which is not the kind we need to regenerate
growth, Morici said.
We are also creating a glut of housing for three to four
years from now, he added. Were essentially
borrowing growth, because were building more houses than
we really need. Remember, houses dont go away.
Theyre not like cars.
Morici said that U.S. economic growth has been constrained by a
trade deficit with China and dependence on foreign oil, both of
which he believes could be remedied within years with the right
Oil has a very simple solution: Start drilling, and
well get it done, he said. Were going
to consume the oil anyway, and it has to be drilled someplace.
And where is the environmental impact better managed: here or
However, Morici predicted that the U.S. economy will likely
grow by no more than 3 percent over the next few years.
I dont see the real challenges of manufacturing
being addressed in these next four years, he said.