Business Assumptions That Affect Your Design & Construction Forecast

Part 1: Illegal Immigration

My intent is not to espouse a position on illegal immigration--for or against.  It is my intention to evoke discussion on about how social and economic issues impact our industry.  So let's take a look at illegal immigration, its impact on facility demands and why it matters to your firm’s business planning.

According to the Department of Homeland Security, Office of Immigration Statistics, there are an estimated 12 million legal permanent residence in the US population—8 million of which are eligible to receive naturalized citizenship.  Throughout our society, legal and illegal immigrants are reflected in a wide array of industries, textiles, manufacturing, agriculture, education. But, their impact, like ours,  is felt in demands on hospitals, schools, roads, bridges, highways--facilities and infrastructure that our profession designs and constructs.

So, what happens to our industry when states seek to address illegal immigration? Let’s look at the case of two states--Alabama and Arizona. According to various reports, the passage of HB 56 in Alabama resulted in as much as a 30 percent decline in elementary school enrollment and a spike in residential vacancy rates as illegal immigrants fled Alabama for neighboring states.  The ripple effect of this exodus has been said to have had an inverse impact on neighboring states.    In Arizona, demand for jails, prisons and detention facilities spiked, as the state sought to hold and potentially deport immigrants.

In both cases, facilities demand was impacted.  In the case of Alabama, the issue of declining illegal student population is further compounding declining enrollment.  In the case of Birmingham, AL, that decline might be as much as $3.75M in Birmingham alone.  As a result, school districts have to rethink their facility needs. For Arizona, the opposite may hold true.  So what does this mean for your business?

As firms begin, and in some cases conclude, their business development planning for next the fiscal year, it is critically important that your firm:

• Reads and understands the planning, design and construction impact of legislative changes on your firm’s design and construction forecast.    
• Completes scenario analyses that consider both positive and negative facility changes as a result of legislative change.
• Engages in public discussions and debates that inform the direction that such impacts could make on your firm.
• Does not assume a “one size fits all.”  Legislative outcome Right or wrong, states are looking at adopting an individual approach to this and other issues.  The impacts on planning and facilities will vary.  

I believe that we can all agree on one thing.   For good or for bad, legislative changes impact our industry.  How well we understand the impact and its implications will determine if our firms can define and develop new opportunities or are relegated to be responsive to the news of the day.


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