Most economists say the U.S. is slowly emerging from the Great Recession, a view that was confirmed to some extent by an exclusive survey of 498 BD+C subscribers whose views we sought on the commercial construction industry’s outlook on business prospects for 2013.
The majority (52.2%) of respondents—architects, engineers, contractors, buildings owners, and others in the commercial, industrial, and institutional field—said their firms were in at least “good” financial health, compared to 49.7% last year.
But a markedly strong showing (86.4%) said their firms would be up in revenues or would at least hold steady in 2013, versus 80.2% last year—an increase that may be not only statistically significant but also most certainly welcome for an industry that could use a bit of cheering.
As was the case last year, more than three-fourths of respondents (75.7%) rated “general economic conditions (i.e., recession)” as the most important concern their firms will face in 2013—roughly comparable to the 78.4% who responded that way last year.
Economy Remains Top Concern for ’13
2013 2012
General economic conditions 75.7% 78.4%
Competition from other firms 44.9% 40.1%
Managing cash flow 37.6% 33.7%
Insufficient capital funding for projects 29.7% 34.5%
Softness in fees/bids 29.7% 28.0%
Government regulations/restrictions 26.6% 23.0%
Price increases (e.g., materials, services)15.7% 18.1%
Avoiding layoffs 16.4% 14.3%
Keeping staff motivated 14.3% 14.3%
Avoiding benefit reductions 11.9% 12.5%
Other factors were largely within the same range as last year, given the margin of error (about 3.5-4%). Competition from other firms (44.9%) went up slightly (from 40.1% in 2011), while having insufficient capital funding for projects declined a bit, to 29.7%, from 34.5% the year before. For both years, nearly three in four (73.4% this year, 74.8% in 2011) described the current business situation for their firms as “very” to “intensely” competitive—further evidence that AEC firms are still struggling for every dollar.
HEALTHCARE, DATA CENTERS LOOK PROMISING FOR ’13
Respondents were asked to rate their firms’ prospects in specific construction sectors on a five-point scale from “excellent” to “very weak.” (Respondents who checked “Not applicable/No opinion/Don’t know” are not counted here.) Among the findings:
- Healthcare continued to be the most highly rated sector, with nearly three-fifths of respondents (58.8%, vs. 54.6% last year) giving it a “good” to “excellent” rating.
- Data centers and mission-critical facilities were also up, with the majority of respondents (52.1%) in the good/excellent category, compared to 45.2% last year
- Senior and assisted-living facilities made a big jump, from last year’s 37.8% of respondents in the good/excellent category, to a majority this year, at 50.5%.
- Government and military work was rated good to excellent by 36.1% of respondents, down slightly from last year’s 41.1%.
- University/college facilities were rated good to excellent by 37.8% of respondents, versus 32.3% in 2011.
- Retail commercial construction got a slight vote of confidence, with nearly one-fifth of respondents (19.9%) stating they thought their firms would have a good to excellent year, nearly double last year’s 11.1%.
- Industrial and warehouse facilities might be staging a comeback: One-fourth (25.5%) of respondents whose firms engaged in that sector said they expect a good to excellent year in 2013; on the other hand, 35.8% said it would be weak or very weak.
Reconstruction—including historic preservation and renovations—accounted for at least 25% of work for more than a third (34.6%) of respondents’ firms, roughly the same as last year (36.3%). Office interiors and fitouts were down, with only 35.7% of this year’s respondents saying this sector would be good to excellent, compared to 42.7% last year.
The prospects for office buildings looked bleak, however, with only 15.6% saying that market would be good to excellent. The majority (55.2%) predicted office buildings would be “weak” or “very weak,” but that’s an improvement from 2011’s 67.3%.
The K-12 sector looked basically flat, with good/excellent responses from 22.9% of respondents this year, compared to 23.2% last year.
As for the use of building information modeling, one-fifth (20.2%) said their firm did not use BIM, about the same as in 2011 (20.6%). Of those who said their firms used BIM, a healthy 26.8% said BIM was used in the majority of projects, based on dollar value—precisely the same as last year. Only a few saw the use of BIM declining in the coming year. Nearly two-fifths (39.0%) of respondents said their companies would be beefing up their investments in technology.
On the communications front, nearly a third of respondents (32.9%) said they did not use social media. Of those who said they did, LinkedIn was the clear choice, at 85.1%, with Facebook in second place (49.5%) and Twitter bringing up the rear (21.1%).
Note: Of the 428 who gave their professional description, 42.1% were architects; 18.7%, engineers; 23.8%, contractors; 5.6% building owners, developers, or facility/property managers; and 9.8%, consultants or “other.” +
Related Stories
| Jun 14, 2012
Viscardi joins LEO A DALY as VP, corporate director of aviation programs
Viscardi will be responsible for providing the vision and strategy for growing the firm’s aviation practice, identifying and establishing new clients, as well as maintaining existing client relationships.
| Jun 14, 2012
Sustainability consultant’s keynote highlights the evolution of LEED green building in Spain
Sustainability planning, green building and water efficiency consultant, Jerry Yudelson keynoted the celebration of Spain’s first LEED Platinum Municipal Green Building.
| Jun 13, 2012
Thornton Tomasetti founding principals receive CTBUH Fazlur R. Khan Lifetime Achievement Medal
This is the first time the CTBUH Board of Trustees has awarded the prize to two individuals jointly.
| Jun 13, 2012
Free webinar on Designing and Building Green Schools scheduled for June 20
USGBC Center for Green Schools and other experts to present practical tips.
| Jun 13, 2012
GAF’s Roving Truck promotion coming to your town soon
Professional roofing contractors or builders/remodelers in the U.S. can enter to win a Ford F-150 truck.
| Jun 13, 2012
Is it time to stop building convention centers?
Over the last 20 years, convention space in the United States has increased by 50%; since 2005, 44 new convention spaces have been planned or constructed in this country alone.
| Jun 13, 2012
Steven L. Newman Real Estate Institute to hold energy asset conference for property owners, senior real estate managers
Top-level real estate professionals have been ignored as the industry has pushed to get sustainability measures in place.
| Jun 12, 2012
SAC Federal Credit Union selects LEO A DALY to design corporate headquarters
LEO A DALY also provided site selection, programming and master planning services for the project over the past year.
| Jun 12, 2012
Restoration Millwork exterior trim achieves GreenCircle certification
Made from cellular polyvinyl chloride, the full line of Restoration Millwork trim, beadboard and accessories is engineered to look, feel and work like top-grade lumber.
| Jun 12, 2012
Piché joins C.W. Driver as director of business development
Piché will expand upon project opportunities for firm’s Southern California operations.