flexiblefullpage

HORIZONTV FEATURING BD+C: WATCH EPISODES ON DEMAND AT HORIZONTV

Menu View Full Menu
Subscribe Here
billboard
interstitial1
catfish1
Currently Reading

As the U.S. economy sputters back to life, contractors wait for the green light on projects [2013 Giants 300 Report]

As the U.S. economy sputters back to life, contractors wait for the green light on projects [2013 Giants 300 Report]

There are enough positive indictors in the economy to justify greenlighting projects, but building owners and developers remain reluctant to pull the trigger. 

By David Barista, Editor-in-Chief | July 16, 2013
Completed in March 2012, the sleek office and prototype facility for global defe
Completed in March 2012, the sleek office and prototype facility for global defense contractor BAE Systems consolidates the companys operations in Sterling Heights, Mich. Walbridge was general contractor on the project, which involved building a 55,000-sf prototype center with 20 bays for vehicle and subsystem testing, and a 164,000-sf office structure to accommodate 600 employees. SmithGroupJJR was the AE firm on the project, providing architectural, structural, mechanical, and electrical services. PHOTO: COURTESY WALBRIDGE AND SMITHGROUPJJR
Continue Reading
The narrative of the U.S. nonresidential construction industry of the last 12 months has been one of growth, but in all the wrong places. While five of the 16 major construction sectors grew last year—some significantly—those that experienced the largest gains represent a relatively small portion of the overall market. On the flip side, several sectors that saw the steepest decline last year happen to make up a fairly sizable portion of nonresidential construction.
 
Lodging, for example, has been on a tear in recent months, growing 16.6% between April 2012 and April 2013 in order to meet the increase in business and leisure travel. Double-digit YOY growth is good news any way you look at it, but the fact that lodging represents just 2% of the overall market means it will do little to move the needle. Same goes for the transportation (11.4% growth), commercial (1.9%), and office (1.6%) sectors: their growth is muted by their relatively small size.
 
On the other hand, major sectors like education, power, and highway and street all saw a drop in construction spending last year.
 
“As a result, when you look at the aggregate, we’re not seeing much of a recovery in nonresidential construction spending,” said Anirban Basu, Chief Economist with the Associated Builders and Contractors (ABC) and Chairman and CEO with Sage Policy Group, during his recent mid-year construction forecast. 

TOP CONTRACTORS

 
2012 Total Revenue ($)
1 Turner Corporation, The $9,084,870,000
2 Fluor $4,268,290,500
3 Skanska USA $4,076,092,814
4 PCL Construction Enterprises $3,981,419,164
5 Whiting-Turner Contracting Co., The $3,699,782,771
6 Clark Group $3,563,246,719
7 Balfour Beatty $3,453,790,847
8 Gilbane $3,083,529,000
9 Structure Tone $2,947,433,000
10 McCarthy Holdings $2,546,000,000
 

TOP CONSTRUCTION MANAGEMENT FIRMS

 
2012 Total Revenue ($)
1 URS Corp. $297,282,076
2 STV $227,390,000
3 JE Dunn Construction $207,304,154
4 Barton Malow $182,697,897
5 Parsons Brinckerhoff $179,900,000
6 S. M. Wilson & Co. $168,859,740
7 Turner Corporation, The $157,920,000
8 Jones Lang LaSalle $140,020,000
9 LPCiminelli $139,198,329
10 Structure Tone $132,000,000
“What we’re seeing is a real dichotomy in the market. There is evidence of private-sector improvement in the data, but we also see strong evidence of constrained public-sector budgets affecting major markets like education and public safety,” he says.  
 
Basu predicted a 5-6% bump in total nonresidential construction spending in 2013, with the bulk of the gains coming from the commercial and industrial sectors. “It’s not terrible news, but given how far nonresidential activity had fallen, this is a really slow rebound at best,” he added.
 
Adding to the frustration of AEC firms, said Basu, is the reluctance of many building owners and developers to pull the trigger on new construction and renovation projects. He said there are enough positive indictors in the U.S. economy to justify greenlighting projects: 2% GDP growth this year, even with the sequestration measures taking hold; falling unemployment numbers; positive consumer spending and household wealth figures; an upturn in housing construction; near-historic-low interest rates; shrinking office and industrial vacancy rates; healthy hotel occupancy rates; and budget surpluses in some states.
 
“All of this suggests we should be in the midst of a fairly robust nonresidential construction recovery, but it’s simply not taking place,” said Basu, offering some possible explanations: uncertainty related to the Affordable Care Act; an investor community that remains largely skittish; slow population growth; troubled state and local government budgets; public pension concerns; high unemployment rates; European Union budget woes; and the overall rise in healthcare costs.
 
This mixed bag of positive and negative economic data translates into a gradual recovery for the nonresidential construction market.
 

Read BD+C's full Giants 300 Report

Tags

Related Stories

Report outlines how Atlanta can collaborate with private sector to spur more housing construction Image by Pharaoh_EZYPT from Pixabay
MFPRO+ News | Aug 14, 2024

Report outlines how Atlanta can collaborate with private sector to spur more housing construction

A report by an Urban Land Institute’s Advisory Services panel, commissioned by the city’s housing authority, Atlanta Housing (AH), offered ways the city could collaborate with developers to spur more housing construction.

8 Canada Square, a Norman Foster-designed office building that’s currently the global headquarters of HSBC Holdings, will have large sections of its façade removed to create landscaped terraces. Design by KPF.
Adaptive Reuse | Aug 14, 2024

KPF unveils design for repositioning of Norman Foster’s 8 Canada Square tower in London

8 Canada Square, a Norman Foster-designed office building that’s currently the global headquarters of HSBC Holdings, will have large sections of its façade removed to create landscaped terraces. The project, designed by KPF, will be the world’s largest transformation of an office tower into a sustainable mixed-use building.

World’s first TRUE Zero Waste for Construction-certified public project, Contra Costa County Administration Building in Martinez, Calif. Photo by Kyle Jeffers Photo, courtesy Webcor
Sustainability | Aug 14, 2024

World’s first TRUE Zero Waste for Construction-certified public project delivered in Calif.

The Contra Costa County Administration Building in Martinez, Calif., is the world’s first public project to achieve the zero-waste-focused TRUE Gold certification for construction. The TRUE Certification for Construction program, administered by Green Business Certification Inc. (GBCI), recognizes projects that achieve exceptional levels of waste reduction, reuse, and recycling.

Mike Sinclair Photo of 80-unit modular construction project in Kansas City
Modular Building | Aug 13, 2024

Strategies for attainable housing design with modular construction

Urban, market-rate housing that lower-income workers can actually afford is one of our country’s biggest needs. For multifamily designers, this challenge presents several opportunities for creating housing that workers can afford on their salaries.

Harvard Pagliuca Life Lab
University Buildings | Aug 12, 2024

Planning for growing computer science programs

Driven by emerging AI developments and digital transformation in the business world, university computer science programs are projected to grow by nearly 15% by 2030.

Artificial intelligence could help reduce energy consumption by as much as 40% by 2050 Image by Tung Nguyen from Pixabay
Energy Efficiency | Aug 9, 2024

Artificial intelligence could help reduce energy consumption by as much as 40% by 2050

Artificial intelligence could help U.S. buildings to significantly reduce energy consumption and carbon emissions, according to a paper by researchers at the Lawrence Berkeley National Laboratory.

AIA course: U.S. healthcare building sector trends and innovations for 2024-2025
Sponsored | Healthcare Facilities | Aug 8, 2024

U.S. healthcare building sector trends and innovations for 2024-2025

As new medicines, treatment regimens, and clinical protocols radically alter the medical world, facilities and building environments in which they take form are similarly evolving rapidly. Innovations and trends related to products, materials, assemblies, and building systems for the U.S. healthcare building sector have opened new avenues for better care delivery. Discussions with leading healthcare architecture, engineering, and construction (AEC) firms and owners-operators offer insights into some of the most promising directions. This course is worth 1.0 AIA/HSW learning unit.

Polsinelli Law Office Reception Area
Office Buildings | Aug 8, 2024

6 design trends for the legal workplace

Law firms differ from many professional organizations in their need for private offices to meet confidentiality with clients and write and review legal documents in quiet, focused environments

Photo by Brett Sayles via Pexels
Data Centers | Aug 8, 2024

Global edge data center market to cross $300 billion by 2026, says JLL

Technological megatrends, including IoT and generative AI, will require computing power to be closer to data generation and consumption, fueling growth of edge IT infrastructure, according to a new JLL report.

ISD Marathon STEM and Robotics Center, Photo: Mariella and Luis Ayala, Ayala Vargas Photography
K-12 Schools | Aug 8, 2024

New K-12 STEM center hosts robotics learning, competitions in Houston suburb

A new K-12 STEM Center in a Houston suburb is the venue for robotics learning and competitions along with education about other STEM subjects. An unused storage building was transformed into a lively space for students to immerse themselves in STEM subjects. Located in Texas City, the ISD Marathon STEM and Robotics Center is the first of its kind in the district. 

boombox1
boombox2

Top Articles

native1

More In Category

halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021