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
| Jun 13, 2014
First look: BIG's spiraling museum for watchmaker Audemars Piguet
The glass-and-steel pavilion's spiral structure acts as a storytelling device for the company's history.
| Jun 13, 2014
Grocery stores, restaurants make neighborhoods most desirable [infographic]
John Burns Real Estate Consulting ranks the top 25 housing amenities by generation, based on feedback from more than 20,000 home shoppers.
| Jun 12, 2014
Zaha Hadid's 'gravity defying' Issam Fares Institute opens in Beirut
The design builds upon the institute’s mission as a catalyst and connector between AUB, researchers and the global community.
| Jun 12, 2014
Tod Williams Billie Tsien Architects' design selected for new UCSC facility
The planned site is a natural landscape among redwood trees with views over Monterey Bay, a site that the architects have called “one of the most beautiful they have ever worked on.”
| Jun 12, 2014
Austrian university develops 'inflatable' concrete dome method
Constructing a concrete dome is a costly process, but this may change soon. A team from the Vienna University of Technology has developed a method that allows concrete domes to form with the use of air and steel cables instead of expensive, timber supporting structures.
| Jun 11, 2014
David Adjaye’s housing project in Sugar Hill nears completion
A new development in New York's historic Sugar Hill district nears completion, designed to be an icon for the neighborhood's rich history.
| Jun 11, 2014
Bill signing signals approval to revitalize New Orleans’ convention center corridor
A plan to revitalize New Orleans' Convention Center moves forward after Louisiana governor signs bill.
| Jun 11, 2014
5 ways Herman Miller's new office concept rethinks the traditional workplace
Today's technologies allow us to work anywhere. So why come to an office at all? Herman Miller has an answer.
| Jun 11, 2014
Koolhaas’ OMA teams with chemical company to study link between color and economy
Dutch company AkzoNobel is partnering with Rem Koolhaas' firm OMA to study how the application of colorful paints and coatings can affect a city's economic development.
| Jun 11, 2014
Oceanic oases: Two new luxury condominiums under construction in South Beach
Slated for completion in 2015, both the seven-story, 275,141 square-foot One Ocean and six-story, 190,654 square-foot Marea will offer landscapes by Enzo Enea and interiors by Yabu Pushelberg.