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
| Dec 16, 2013
Construction materials prices remain stable in November
Overall, construction materials prices fell 0.5 percent in November and are up only 1.1 percent year over year, according to the Department of Labor’s Dec. 13 Producer Price Index.
| Dec 16, 2013
Helene Combs Dreiling, FAIA, inaugurated 2014 AIA President
Helene Combs Dreiling, FAIA, executive director of the Virginia Center for Architecture, was inaugurated as the 90th president of the American Institute of Architects (AIA) during ceremonies held on December 12th at the Andrew W. Mellon Auditorium. She succeeds Mickey Jacob, FAIA, in representing nearly 83,000 AIA members.
| Dec 13, 2013
GRW acquires West Virginia design firm Chapman Technical Group
GRW is expanding its capabilities through the recent acquisition of Chapman Technical Group, a 36-person West Virginia-based firm.
| Dec 13, 2013
AIA, MIT issue joint report on impact of design on public health
The research looks at the health of eight U.S. cities and lays out a path for translating the research into meaningful findings for policy makers and urban planners.
| Dec 11, 2013
Wyndham unveils hotel prototype for its Hawthorn Suites chain
The extended-stay hotel prototype reduces development costs by 46% for franchisees and enhances the overall guest experience.
| Dec 10, 2013
16 great solutions for architects, engineers, and contractors
From a crowd-funded smart shovel to a why-didn’t-someone-do-this-sooner scheme for managing traffic in public restrooms, these ideas are noteworthy for creative problem-solving. Here are some of the most intriguing innovations the BD+C community has brought to our attention this year.
| Dec 9, 2013
Tips for designing higher education's newest building type: the learning commons
In this era of scaled-down budgets, maximized efficiencies, new learning methods and social media’s domination of face time, college and university campuses are gravitating toward a new space type: the learning commons.
| Dec 9, 2013
Does technology help or hinder innovation?
Whether digital technology will help or hinder workplace insights remains a topic of ongoing debate. FastCo.Design features insights from business scholars on both sides of the issue.
| Dec 6, 2013
French concert hall includes integrated musical elements [VIDEO]
La Métaphone, a concert hall in Ognies, France, is a 1,980-sm facility with the unique characteristic of being a structural musical instrument. The solar-powered building incorporates musical elements in its walls, which can be played by musicians inside or outside the facility.
| Dec 6, 2013
Goettsch Partners selected 2013 AIA Chicago Firm of the Year
Architecture firm Goettsch Partners (GP) has been named the 2013 Firm of the Year, as conferred by the Chicago chapter of the American Institute of Architects (AIA Chicago). The award is the highest honor a firm can receive from the chapter.