Gilbane Building Company today announces the publication of the Spring 2013 edition of Construction Economics – Market Conditions in Construction. Based on an array of economic data, construction starts, and material cost trends, the data is the most positive the company has seen in recent years.
“We are in a growth period that by all leading indicators seems here to stay. From 2006 to 2010, as work declined, we saw the largest decline of margins in recent history. In 2011 that trend began to reverse slightly” says Ed Zarenski, the report’s author and a 40-year veteran of the construction industry. “I expect the positive growth to continue.”
According to the report, the monthly rate of construction spending is up 20% in 24 months and increased in 18 of the last 24 months, which is a good leading indicator for new construction work in Q3-Q4 2013.
Other highlights include:
- Residential spending will take the lead in 2013, nonresidential spending will lag.
- Public spending will decline. Private spending will lead the charge in 2013.
- As spending continues to increase, even moderate growth in activity will allow contractors to pass along more material costs and increase margins. When activity picks up in all sectors, escalation will begin to advance rapidly.
- Predicted spending growth of 8.2% for Commercial markets, 5.2% for Office and 2.3% for Healthcare.
Construction jobs grew by 150,000 in the last five months. Just to meet the needs of the predicted residential building expansion, the workforce needs to grow by 750,000 jobs in the next two years, faster than the entire construction workforce has ever grown in history.
Future escalation, in order to support labor growth, materials demand and to capture increasing margins, will be higher than normal labor/material cost growth. Lagging regions may take longer to experience high escalation. Residential escalation will be near the upper end of the range.
This free report and its executive summary are available for download at http://www.gilbaneco.com/economic-report.
About Gilbane, Inc.
Gilbane provides a full slate of construction and facilities-related services – from pre-construction planning and integrated consulting capabilities to comprehensive construction management, close-out and facility management services – for clients across various markets. Marking its 140th year in operation and still a privately held, family-run company, Gilbane has more than 60 office locations around the world. To find out what the next 140 years have in store, visit www.gilbaneco.com.
Related Stories
Architects | Jan 28, 2016
25-year-old architect wins competition for World War I memorial in Pershing Park
Joe Weishaar and sculptor Sabin Howard were selected from among five finalists and over 350 entries overall.
| Jan 28, 2016
AIA CES class: The rainscreen approach to a better building envelope
Building envelope expert Bradley Carmichael of Hoffmann Architects explains how rainscreen wall systems work and evaluates the effectiveness of various rain-control methods, including mass walls, perfect barriers, and masonry veneers. This AIA/CES class is worth 1.0 learning unit.
Architects | Jan 28, 2016
2015 was a record year for mergers and acquisitions in the AE industry [infographic]
Consulting firm Morrissey Goodale tracked a record 234 sales of U.S.-based A/E firms last year.
Architects | Jan 27, 2016
NCARB to rename the Intern Development Program
This June, the program designed to guide aspiring architects through the early stages of their career will be renamed the Architectural Experience Program (AXP).
Architects | Jan 26, 2016
HOK promotes Bill Hellmuth to chief executive
Hellmuth is set to replace Patrick MacLeamy, who will remain as the firm’s chairman.
Mixed-Use | Jan 25, 2016
SOM unveils renderings of dual-tower Manhattan West development
The five million-sf project includes two office towers, a residential tower, retail space, and a new public square.
Office Buildings | Jan 21, 2016
Nike reveals design, first images of planned 3.2 million-sf expansion to its world headquarters
The expansion looks to combine design elements inspired by human movement, speed, and the strength and energy of competition.
Market Data | Jan 20, 2016
Architecture Billings Index ends year on positive note
While volatility persists, architecture firms reported healthy performance for 2015.
Architects | Jan 18, 2016
EHDD’s Monterey Bay Aquarium wins AIA Twenty-five Year Award
The aquarium set new technical standards for the building type, which still influence today, such as the flow-through seawater-based heat pump system, naturalistic exhibitions, and corrosion protection.
Architects | Jan 15, 2016
Best in Architecture: 18 projects named AIA Institute Honor Award winners
Morphosis' Perot Museum and Studio Gang's WMS Boathouse are among the projects to win AIA's highest honor for architecture.